Lightning eMotors, Inc. (the “Company”, “Lightning”) ~~was~~designs and manufactures zero-emission vehicles (“ZEV”) and charging infrastructure solutions for commercial fleets, large enterprises, original equipment manufacturers, and governments. The Company’s product offerings range from electrified cargo vans, transit and shuttle buses, school buses, specialty work trucks, ambulances, mobile and stationary chargers and electric powertrains for school buses, transit buses and motorcoaches. The Company operates predominately in the United States.

On May 6, 2021, GigCapital3, Inc. (“Gig”), consummated the merger pursuant to the Business Combination Agreement, dated December 10, 2020, by and among Project Power Merger Sub, Inc., a wholly-owned subsidiary of Gig incorporated in the State of Delaware, ~~on February 3, 2020. The Company was formed for the purpose of effecting~~and Lightning Systems, Inc., a ~~merger, capital stock exchange, asset acquisition, stock purchase, reorganization or similar business combination with one or more businesses~~Delaware corporation (“Lightning Systems”) (the “Business Combination”). The Company is an “emerging growth company,” as defined in Section 2(a) of the Securities Act of 1933, as amended (the “Securities Act”), as modified by the Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”).

As of June 30, 2020, the Company had not commenced any operations. All activity for the period from February 3, 2020 (date of inception) through June 30, 2020 relates to the Company’s formation and the initial public offering (the “Offering”), as described in Note 3, and identifying a target Business Combination, as described below. The Company will not generate any operating revenues until after completion of its initial Business Combination, at the earliest. The Company will generate non-operating income in the form of interest income on cash and cash equivalents from the proceeds derived from the Offering. The Company has selected December 31 as its fiscal year end.

On May ~~5, 2020, the registration statement on Form S-1 (the “Registration Statement”), as amended, filed~~6, 2021, and in connection with the Offering was declared effective and amended by the Post-Effective Amendment No. 1 to the Registration Statement, as declared effective by the SEC on May 13, 2020. The Company concurrently entered into an underwriting agreement on May 13, 2020 to conduct the Offering, the closing of which was consummated on May 18, 2020 with the delivery of 20,000,000 units (the “Units”). The Units sold in the Offering consisted of the securities described in Note 3. The Offering generated gross proceeds of $200,000,000.

~~Simultaneously~~ with the closing of the Offering, the Company consummated the closing of a private placement sale (the “Private Placement”) of 893,479 units (the “Private Placement Units”), at a price of $10.00 per Private Placement Unit. Business Combination, Gig changed its name to Lightning eMotors, Inc.

The Company’s sponsor, GigAcquisitions3, LLC, a Delaware limited liability company (the “Sponsor” and is sometimes referred to as the “Founder”) purchased 650,000 Private Placement Units and Nomura Securities International, Inc. (“Nomura”), Oppenheimer & Co. Inc. (“Oppenheimer”) and Odeon Capital Group LLC (“Odeon”) (collectively, the “Underwriters”) purchased 243,479 Private Placement Units in the aggregate. The Private Placement Units consisted of the securities described in Note 4. The closing of the Private Placement generated gross proceeds of $8,934,790 consisting of $6,500,000 from the sale of the Private Placement Units to the Founder and $2,434,790 from the sale of Private Placement Units to the Underwriters.

Following the closing of the Offering, net proceeds in the amount of $196,000,000 from the sale of the Units and proceeds in the amount of $6,000,000 from the sale of Private Placement Units, for a total of $202,000,000, were placed in a trust account (“Trust Account”), which is described further below.

Transaction costs amounted to $12,785,179, consisting of $4,000,000 of underwriting fees, $8,000,000 of deferred underwriting fees and $785,179 of offering costs. The Company’s remaining cash after payment of the offering costs will be held outside of the Trust Account for working capital purposes. Subsequently to the closing of the Offering, offering costs of $785,179 accrued for at the closing of the Offering were reduced to $747,907. Therefore, total transaction costs amounted to $12,747,907.

~~The Trust Account~~

~~The funds in the Trust Account~~accompanying consolidated financial statements have been ~~invested only~~prepared in ~~money market funds meeting certain conditions under Rule 2a-7 under the Investment Company Act of 1940 which invest only in direct~~accordance with U.S. government obligations. Funds will remain in the Trust Account until the earlier of (i) the consummation of the Business Combination or (ii) the distribution of the Trust Account as described below. The remaining proceeds from the Offering outside the Trust Account may be used to pay for business, legal and accounting due diligence expenses on acquisition targets and continuing general and administrative expenses.

The Company’s amended and restated certificate of incorporation provides that, other than the withdrawal of interest to pay taxes, none of the funds held in the Trust Account will be released until the earlier of: (i) the completion of the Business Combination; (ii) the redemption of 100% of the shares of common stock included in the units sold in the Offering (the “public shares”) if the Company is unable to complete a Business Combination within 18 months from the closing of the Offering on May 18, 2020; or (iii) the redemption of the public shares in connection with a stockholder vote to amend the Company’s amended and restated certificate of incorporation to modify the substance or timing of the Company’s obligation to redeem 100% of its public shares if it does not complete its initial Business Combination within 18 months from the closing of the Offering on May 18, 2020.

~~Business Combination~~

The Company’s management has broad discretion with respect to the specific application of the net proceeds of the Offering, although substantially all of the net proceeds of the Offering are intended to be generally applied toward consummating a Business Combination with (or acquisition of) a target business (“Target Business”). As used herein, Target Business must be with one or more target businesses that together have a fair market value equal to at least 80% of the balance in the Trust Account (less taxes payable on interest earned at the time the Company signs a definitive agreement in connection with the Business Combination). There is no assurance that the Company will be able to successfully effect a Business Combination.

The Company, after signing a definitive agreement for a Business Combination, will either (i) seek stockholder approval of the Business Combination at a meeting called for such purpose in connection with which stockholders may seek to redeem their shares, regardless of whether they vote for or against the Business Combination, for cash equal to their pro rata share of the aggregate amount then on deposit in the Trust Account as of two business days prior to the consummation of the initial Business Combination, including interest but less taxes payable or (ii) provide stockholders with the opportunity to have their shares redeemed by the Company by means of a tender offer (and thereby avoid the need for a stockholder vote) for an amount in cash equal to their pro rata share of the aggregate amount then on deposit in the Trust Account as of two business days prior to commencement of the tender offer, including interest but less taxes payable. The decision as to whether the Company will seek stockholder approval of the Business Combination or will allow stockholders to redeem their shares to the Company in a tender offer will be made by the Company, solely in its discretion, and will be based on a variety of factors such as the timing of the transaction and whether the terms of the transaction would otherwise require the Company to seek stockholder approval unless a vote is required by New York Stock Exchange rules. If the Company seeks stockholder approval, it will complete its Business Combination only if a majority of the outstanding shares of common stock voted are voted in favor of the Business Combination. However, in no event will the Company redeem its public shares in an amount that would cause its net tangible assets to be less than $5,000,001 upon consummation of a Business Combination. In such case, the Company would not proceed with the redemption of its public shares and the related Business Combination, and instead may search for an alternate Business Combination.

If the Company holds a stockholder vote or there is a tender offer for shares in connection with a Business Combination, a public stockholder will have the right to redeem its shares for an amount in cash equal to its pro rata share of the aggregate amount then on deposit in the Trust Account as of two business days prior to the consummation of the initial Business Combination, including interest but less taxes payable. As a result, such shares of common stock have been recorded at their redemption amount and classified as temporary equity. The amount held in the Trust Account as of June 30, 2020 was $202,007,715, which represents cash and marketable securities of $202,000,000 from the sale of 20,000,000 Units at $10.00 per public share, net of underwriting fees of $4,000,000, the sale of 243,479 Private Placement Units to the Underwriters at $10.00 per Private Placement Unit, the sale of 650,000 Private Placement Units at $10.00 per Private Placement Unit, net of cash reserved for operating needs of the Company, and $7,715 of interest income earned on these holdings.

Additionally, there was $13,262 of interest accrued, but not yet credited to the Trust Account, which was recorded in the condensed balance sheet in interest receivable on cash and marketable securities held in the Trust Account as of June 30, 2020.

The Company will have 18 months from May 18, 2020, the closing date of the Offering, to complete its initial Business Combination. If the Company does not complete a Business Combination within this period of time, it shall (i) cease all operations except for the purposes of winding up; (ii) as promptly as reasonably possible, but not more than ten business days thereafter, redeem the public shares of common stock for a per share pro rata portion of the Trust Account, including interest, but less taxes payable (less up to $100,000 of such net interest to pay dissolution expenses) and (iii) as promptly as possible following such redemption, dissolve and liquidate the balance of the Company’s net assets to its creditors and remaining stockholders, as part of its plan of dissolution and liquidation. The Founder, the Underwriters, and Messrs. Weightman, Wang and Betti-Berutto (the “Insiders”) have entered into letter agreements with the Company, pursuant to which they have agreed to waive their rights to participate in any redemption with respect to their initial shares; however, if the Founder, the Underwriters, the Insiders or any of the Company’s officers, directors or affiliates acquired shares of common stock after the Offering, they will be entitled to a pro rata share of the Trust Account upon the Company’s redemption or liquidation in the event the Company does not complete a Business Combination within the required time period.

In the event of such distribution, it is possible that the per share value of the residual assets remaining available for distribution (including Trust Account assets) will be less than the initial public offering price per Unit.

~~2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES~~

~~Basis of Presentation~~

~~The accompanying unaudited condensed interim financial statements of the Company are presented in conformity with accounting principles generally accepted in the United States of America~~Generally Accepted Accounting Principles (“GAAP”) and pursuant to the ~~rules and~~ regulations of the

U.S. Securities and Exchange Commission (“SEC”) ~~and reflect all adjustments, consisting only of normal recurring adjustments, which are,~~. The unaudited financial information reflects, in the opinion of management, all adjustments, consisting of normal recurring adjustments, considered necessary for a fair ~~presentation~~statement of the Company’s financial position, ~~as of June 30, 2020, and the~~ results of operations and cash flows for the periods ~~presented. Certain information and disclosures normally included in financial statements prepared in accordance with GAAP have been omitted pursuant to such rules and regulations.~~

indicated. The ~~accompanying unaudited condensed~~results reported for the interim period presented are not necessarily indicative of results that may be expected for the full year. These consolidated financial statements should be read in conjunction with the ~~Company's final prospectus dated May 13, 2020, as well as~~audited consolidated financial statements and notes thereto included in the Company’s ~~current report~~Annual Report on Form ~~8-K filed with the SEC on May 26, 2020. The results of operations for the interim periods presented are not necessarily indicative of the results to be expected~~10-K for the year ~~ending~~ended December 31, ~~2020 or for any future interim periods.~~

~~Emerging Growth Company~~

~~Section 102(b)(1)~~2022.

The consolidated financial statements include the accounts of the ~~JOBS Act exempts emerging growth companies from being required to comply with new or revised financial accounting standards until private companies (that is, those that~~Company and its wholly-owned subsidiaries. Intercompany accounts and transactions have ~~not had~~been eliminated.

The Company has suffered recurring losses from operations. The continuation of the Company as a going concern is dependent upon the Company attaining and maintaining profitable operations and/or raising additional capital from equity offerings, debt financings or other capital markets transactions, collaborations, strategic partnerships or licensing arrangements.

The Company has secured and intends to employ various strategies to obtain the required funding for future operations such as accessing capital through the Pre-Paid Advance Agreement with YA II PN, Ltd. (“Yorkville”) or the ELOC Agreement with Lincoln Park Capital, LLC. However, the ability to access the Pre-Paid Advance or the ELOC Agreement in full is dependent on various factors, such as common stock trading volumes, market prices and obtaining stockholder

The Company has been ~~excluded~~working with financial advisors to assist the Company in identifying strategic partners and financing to fund operations and to take actions to maximize our liquidity. If capital is not available to the Company when, and in the amounts needed, the Company could be required to liquidate its inventory, cease or curtail operations, or seek protection under applicable bankruptcy laws or similar state proceedings. The result of the Company's ASC 205-40 analysis, due to uncertainties discussed above, there is substantial doubt about the Company's ability to continue as a going concern through the next twelve months from the ~~calculation~~date of issuance of these consolidated financial statements.

During the ~~basic net loss per share since such shares, if redeemed, only participate in their pro rata share of the Trust Account earnings. When calculating its diluted net loss per share,~~three and six months ended June 30, 2023, the Company ~~has not considered~~received proceeds in the ~~effect~~amount of ~~(i) the incremental number of~~$2,944 and issued 461,548 shares of common stock to ~~settle warrants sold in~~Yorkville. Since June 30, 2023 and through the ~~Offering and Private Placement, as calculated using~~filing date, the ~~treasury stock method; (ii) the shares~~Company issued ~~to the Insiders representing 15,000~~315,605 shares of common stock ~~underlying restricted stock awards for~~to Yorkville. As of June 30, 2023 and through the ~~periods they were outstanding; and (iii)~~date of this filing, the ~~750,000~~Company has not sold any shares of common stock ~~issued~~ to Lincoln Park under the ~~Founder~~ELOC Agreement other than the commitment shares (and is prohibited from accessing the ELOC Agreement while advances are outstanding to Yorkville).

These consolidated financial statements have been prepared by management in accordance with GAAP and this basis assumes that ~~were forfeited due to the over-allotment option not being exercised by the Underwriters. Since~~ the Company ~~was in~~will continue as a ~~net loss position during~~going concern, which contemplates the ~~periods after deducting net income attributable to common stock subject to redemption, diluted net loss per common share is~~realization of assets and the ~~same as basic net loss per common share for the periods presented as the inclusion~~satisfaction of ~~all potential common shares outstanding would have been anti-dilutive.~~

~~Reconciliation of Net Loss Per Common Share~~

~~In accordance with the two-class method, the Company’s net loss is adjusted for net income that is attributable to common stock subject to redemption, as these shares only participate~~liabilities and commitments in the ~~income~~normal course of ~~the Trust Account and not the losses~~business.

The preparation of financial statements in conformity with GAAP requires ~~the Company’s~~ management to make certain estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of ~~revenues~~revenue and expenses during the reporting period. The Company’s most significant estimates and judgments involve deferred income taxes, provision for credit losses, warranty liability, write downs and write offs of obsolete and damaged inventory and valuations of share-based compensation, warrant liability, convertible note derivative liability and earnout share liability. Management bases its estimates on historical experience and on various other assumptions believed to be reasonable, the results of which form the basis for making judgments about the carrying values of assets and liabilities. Actual results could differ from those ~~estimates.~~

~~Offering~~estimates, and such differences could be material to the Company’s financial statements.

As of June 30, 2023, one customer accounted for 40% of the Company’s total accounts receivable. As of December 31, 2022, two customers accounted for 40% and 25% of total accounts receivable. The net sales to the following customers comprised more than 10% of revenues for the periods presented.

As of June 30, 2023, one supplier accounted for 73% of the Company’s total accounts payable. As of December 31, 2022, two suppliers accounted for 20% and 15% of the Company’s total accounts payable. For the three months ended June 30, 2023, one supplier accounted for 46% of inventory purchases. For the three months ended June 30, 2022, two suppliers accounted for 42% and 32% of inventory purchases. For the six months ended June 30, 2023, two suppliers accounted for 33% and 11% of inventory purchases. For the six months ended June 30, 2022, two suppliers accounted for 40% and 26% of inventory purchases.

Cash and cash equivalents include cash held in banks and in money market funds. The Company’s cash and cash equivalents are placed with high-credit-quality financial institutions and issuers, and at times exceed federally insured limits. To date, the Company has not experienced any credit loss relating to its cash and cash equivalents. The carrying value of the cash equivalents approximates fair value, which represents a Level 1 input.

Accounts receivable are recorded at invoiced amounts, net of discounts, and allowances. The Company grants credit in the normal course of business to its customers. The Company periodically performs credit analyses and monitors the financial condition of its customers to reduce credit risk. The Company reduces the carrying value for estimated uncollectible accounts based on a variety of factors including the length of time receivables are past due, economic trends and conditions affecting the Company’s customer base, and historical collection experience. Specific provisions are recorded for individual receivables when the Company becomes aware of a customer’s inability to meet its financial obligations. The

Company writes off accounts receivable when they are deemed uncollectible. The following table details the change in the allowance for credit losses for the periods indicated:

Inventories consist of raw materials, work in progress, and finished goods and are stated at the lower of cost or net realizable value, with cost determined on the average cost method. A valuation adjustment is made to inventory for any excess, obsolete or slow-moving items based on management’s review of on-hand inventories compared to historical and estimated future sales and usage profiles.

Property and equipment is stated at cost, less accumulated depreciation. Depreciation is provided using the straight-line method over the estimated useful asset lives. Leasehold improvements are stated at cost and amortized on the straight-line basis over their estimated economic useful lives or the lease term, whichever is shorter. Costs

~~Offering~~ of enhancements or modifications that substantially extend the capacity or useful life of an asset are capitalized and depreciated accordingly. Ordinary repairs and maintenance are expensed as incurred. Depreciation is included in the consolidated statements of operations in “Cost of revenues”, “Research and development” and “Selling, general and administrative.” When property is retired or otherwise disposed of, the cost and accumulated depreciation are removed from the consolidated balance sheets and the resulting gain or loss, if any, is reflected in “Other income, net.” The estimated useful lives of the Company’s major classes of property and equipment are as follows:

Long-lived assets to be held and used in the Company’s operations are evaluated for impairment when events or circumstances indicate the carrying value of a long-lived asset or asset group is less than the undiscounted cash flows from its use and eventual disposition over its remaining economic life. The Company assesses recoverability by comparing the sum of projected undiscounted cash flows from the use and eventual disposition over the remaining economic life of a long-lived asset or asset group to its carrying value, and records a loss from impairment if the carrying value is more than its undiscounted cash flows. Assets or asset groups to be abandoned or from which no future benefit is expected are written

down to zero in the period it is determined they will no longer be used and are removed entirely from service. There were no impairments of long-lived assets recognized during the three and six months ended June 30, 2023 and 2022.

The Company manufactures and sells ZEVs, such as delivery vans and buses. The Company manufactures ZEVs by removing the internal combustion engine and certain associated components (collectively, “decontented parts”) and installing and integrating its internally-developed, zero-emission powertrain into a vehicle chassis supplied by original equipment manufacturer (“OEM”) partners or from the customer. At times, the Company also installs and integrates its zero-emission powertrains into a used vehicle chassis supplied by the customer (“repower”).

The Company recognizes revenue at a point in time when its performance obligation has been satisfied and control of the ZEV or zero-emission powertrain is transferred to the customer, which generally aligns with shipping terms. Contract shipping terms include ExWorks (“EXW”), “FOB Shipping Point” and “FOB Destination” all as defined in the Incoterms. Under EXW (meaning the seller fulfills its obligation to deliver when it makes goods available at its premises, or another specified location, for the buyer to collect), the performance obligation is satisfied and control is transferred at the point when the customer is notified that the ZEV is available for pickup. Under “FOB Shipping Point,” control is transferred to the customer at the time the good is transferred to the shipper and under “FOB Destination,” at the time the good is delivered to a customer’s specified delivery location. At times, the Company sells ZEVs that require additional upfitting from a third party before the final sale to the customer. The Company is acting as the principal in such transactions and revenue is recognized on a gross basis.

Other revenue primarily includes the sale of stand-alone zero-emission powertrains, charging systems, engineering consulting services, telematics and analytics subscription services and decontented parts. Revenue for zero-emission powertrains, chargers and decontented parts is generally recognized based on contract shipping terms. At times, chargers may be drop shipped directly to the customer from the manufacturer, in which revenue is recognized at the time of shipment. The Company is acting as the principal in such transactions and revenue is recognized on a gross basis. Services are recognized as revenue over time as either percentage of completion (i.e. engineering service contracts) or as the service is transferred to the customer (i.e. telematics and analytics subscription services).

The Company made an accounting policy election to account for any shipping and handling costs that occur after control has transferred to the customer as fulfillment costs that are accrued to cost of revenues at the time control transfers. Shipping and handling costs billed to customers are initially recorded in deferred revenue and recognized as revenue once shipping is complete.

The Company often applies for governmental funding programs, including California’s Hybrid and Zero Emission Truck and Bus Voucher Incentive Project (“HVIP”), on behalf of its customers for ZEV sales. Generally, as a condition of the program, the amount billed to the customer must be reduced by the amount that will be funded by the government program, and the Company will receive the funds directly from the government program. However, the discount to the customer is contingent upon the Company’s receipt of the funding. Revenue is recognized on the gross amount of the ZEV at the time substantially all of the conditions of the government program required of the Company have been met and control of the ZEV has transferred to the customer based on shipping terms.

The following economic factors affect the nature, amount, timing, and uncertainty of the Company’s revenue and cash flows as indicated:

None of the Company’s contracts have a significant financing component. Any cash that is received prior to revenue recognition is deferred as deferred revenue (a contract liability) until the good is delivered or service is rendered. Payment terms are identified when the contract has commercial substance and collectability of consideration is probable. The Company generally utilizes payment terms of a twenty percent deposit once a contract is executed with the remainder due upon receipt.

Contract liabilities relate to payments received in advance of performance obligations under the contract and are realized when the associated revenue is recognized under the contracts. The Company’s contract liabilities consist of customer deposits and deferred revenue, of which current amounts are included in “Accrued expenses and other current liabilities” and long-term amounts are included in “Other long-term liabilities” on the consolidated balance sheets. Changes in contract liabilities are as follows:

Based on the Company’s standard terms and conditions, consideration paid for goods and/or services that customers purchase from the Company are nonrefundable. Therefore, at the time revenue is recognized, the Company does not estimate expected refunds for goods or services, nor does the Company exclude any such amounts from revenue.

The transaction price of a contract is the amount of consideration to ~~mandatory redemption (if any) is classified~~which the Company expects to be entitled in exchange for transferring promised goods to a customer. Transaction prices do not include amounts collected on behalf of third parties (e.g., sales taxes). Sales taxes collected on sales are recorded as a sales tax liability ~~instrument~~ and ~~is measured at fair value. Conditionally redeemable common stock (including common stock~~are included in “Accrued expenses and other current liabilities.”

To determine the transaction price of a contract, the Company considers its customary business practices and the terms of the contract. For the purpose of determining transaction prices, the Company assumes that ~~features redemption~~the goods and/or services will be transferred to the customer as promised in accordance with existing contracts and that the contracts will not be canceled, renewed, or modified. The Company’s revenue terms do not include retrospective or prospective volume discounts, rights of return, rebates, performance bonuses or other forms of variable consideration.

The Company’s contracts with customers have fixed transaction prices that are ~~either within~~denominated in U.S. dollars and payable in cash.

The Company has applied the practical expedient to exclude the value of remaining performance obligations for (i) contracts with an original term of one year or less and (ii) contracts for which the Company recognizes revenue in proportion to the amount it has the right to invoice for services performed (i.e. analytical data subscription services).

As of June 30, 2023, the Company had remaining performance obligations related to a non-cancellable (other than for a breach by the Company) minimum-quantity purchase commitment. The customer is obligated to purchase a fixed number of ZEVs through December 31, 2023. The Company estimates that the future revenues associated with this contract (based on estimated orders from the customer) will be $3,744 in 2023 and $5,184 in 2024. The timing of the revenue associated with these estimates will change if the ZEVs are commissioned and/or shipped subsequent to the year in which they were ordered, as revenue will not be recognized until control of the ~~holder~~ZEV transfers to the customer based on the purchase order shipping terms.

The following table summarizes the Company’s contract balances:

The Company has elected the practical expedient to ~~redemption~~expense contract acquisition costs, which consist of sales commissions, which are reported within “Selling, general and administrative” expenses.

All ZEVs that customers purchase from the Company are covered by five-year and 60-thousand-mile limited product warranties. At the time revenue is recognized, the Company estimates the cost of expected future warranty claims and accrues estimated future warranty costs based upon the ~~occurrence~~history of ~~uncertain events not solely within~~warranty claims. The Company periodically reviews the adequacy of its product warranties and adjusts, if necessary, the warranty estimate and accrued warranty liability for actual historical experience. The warranty liability is included in “Accrued expenses and other current liabilities” and the cost of warranties is included in “Cost of revenues.”

At times, the Company may sell its ZEVs with an extended product warranty, with coverage beyond the five-year and 60-thousand-mile limited standard warranty. The Company considers these extended warranties to be separate performance obligations. The consideration allocated to the extended warranty is deferred and recognized over the term of the extended warranty. The Company’s ~~control)~~deferred revenue associated with extended warranties is currently all classified as ~~temporary equity. At all other times, common stock~~long-term within “Other long-term liabilities.”

The Company records product recall reserves when a liability is ~~classified as stockholders’ equity.~~probable and the related amounts are reasonably estimable.

On March 27, 2023, the Company initiated a voluntary recall for certain model year 2020 FT3-43, 2019-2022 FT3-86, 2020 FE4-86 and 2019-2021 FE4-129 vehicles equipped with eMatrix battery packs. Defective structural welds and internal radiator leaks have been found in the battery packs which may result in isolation faults and cell imbalances. The affected vehicles may lose traction power, increasing the potential for collisions or experience a thermal runaway which could result in vehicle fires. The Company is still in process of developing a remedy for the structural welds and internal radiator leaks and at this time is unable to ~~occurrence of uncertain future events. Accordingly, as of June 30, 2020, common stock subject to possible redemption is presented as temporary equity, outside~~reasonably estimate a range of the ~~stockholders’ equity section of~~potential losses associated with the ~~Company’s condensed balance sheet.~~

~~Stock-based Compensation~~

~~Stock-based compensation related to restricted stock awards are~~recall.

A fair value hierarchy was established that prioritizes fair value measurements based on ~~fair value~~the types of common stock on the grant date. The shares underlying the Company’s restricted stock awards are subject to forfeiture if these individuals resign or are terminated for cause prior to the completion of the Business Combination. Therefore, the related stock-based compensation will be recognized upon the completion of a Business Combination, unless the related shares are forfeited prior to a Business Combination occurring.

~~Income Taxes~~

~~The Company follows the asset and liability method of accounting for income taxes. Deferred tax assets and liabilities are recognized~~inputs used for the ~~estimated future tax consequences attributable to differences between the~~various valuation techniques (market approach, income approach, and cost approach). The Company’s financial ~~statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax~~ assets and liabilities are measured using ~~enacted tax rates expected~~inputs from the three levels of the fair value hierarchy. The three levels of the hierarchy and the related inputs are as follows:

An asset’s or liability’s fair value measurement level within the fair value hierarchy is based on the lowest level of any input that is significant to ~~apply~~the fair value measurement. Valuation techniques used need to ~~taxable income~~maximize the use of observable inputs and minimize the use of unobservable inputs. Assets and liabilities measured at fair value are based on one or more of the following three valuation techniques:

The Company believes its valuation methods are appropriate and consistent with other market participants, however, the use of different methodologies or assumptions to determine the fair value of certain financial instruments could result in a different fair value measurement at the reporting date. The Company’s recurring fair value measurements categorized within Level 3 discussed below contain significant unobservable inputs. A change in those significant unobservable inputs could result in a significantly higher or lower fair value measurement at the reporting date.

The Company’s financial instruments consist of cash and cash equivalents, accounts receivable, accounts payable, accrued liabilities, warrant liabilities, long-term debt, derivative liabilities and earnout liabilities. The carrying value of cash, accounts receivable, accounts payable, and accrued liabilities approximate fair value because of the short-term nature of those instruments.

Current debt is not presented at fair value on the consolidated balance sheets, as it is recorded at carrying value, net of unamortized debt discounts. However, the 7.5% $100,000 convertible senior note (the “Convertible Note”) has an embedded conversion option accounted for as a derivative liability, which is presented at fair value on the consolidated balance sheets. The fair value of the Convertible Note, including the conversion option, was $51,336 and $58,155 as of June 30, 2023 and December 31, 2022, respectively. The Company’s term note and working capital facility (“Facility”) had an outstanding term note with a principal amount of $3,000 as of both June 30, 2023 and December 31, 2022 and a fair value of $3,099 and $3,125 as of June 30, 2023 and December 31, 2022, respectively.

The following tables set forth by level within the fair value hierarchy the Company’s financial assets and liabilities that were measured at fair value on a recurring basis in the ~~years~~consolidated balance sheets.

As of June 30, 2023 and December 31, 2022, the Company had cash equivalents held in a money market account. The Company has concluded that due to the highly liquid nature of the money market account, the carrying value approximates fair value, which represents a Level 1 input.

As a result of the Business Combination, the Company assumed the liability associated with the Gig warrants. The Company accounts for the warrants as liabilities at fair value with subsequent changes in fair value recorded in the statement of operations for each reporting period. The fair value is determined using the Black-Scholes-Merton option-pricing model (“BSM”) where the share price input represents the Company’s stock price as of the valuation date. The BSM is a commonly-used mathematical model for pricing an option or warrant. In particular, the model estimates the variation in value over time of financial instruments. The fair value measurements are considered Level 3 measurements within the fair value hierarchy.

The Company estimates the fair value of its derivative liability associated with the Convertible Note at each reporting date, as well as at each conversion date. The Convertible Note and embedded conversion option are valued using a Binomial Lattice Model designed to capture incremental value attributed to the conversion options in addition to the value of the Convertible Note. The value of the Convertible Note without the conversion feature is valued utilizing the income approach, specifically the discounted cash flow method. Cash flows are discounted utilizing the U.S. Treasury rate and the credit spread to estimate the appropriate risk-adjusted rate. The conversion feature utilizes the Company’s stock price as of the valuation date as the starting point of the valuation. A Binomial Lattice Model is used to estimate a credit spread by solving for a premium to the U.S. Treasury rate that produces a value of the Convertible Note. As of issuance, the value of the Convertible Note and warrants related to the Convertible Note were set to equal $100,000 to solve for the credit spread which is then updated quarterly. The fair value measurements are considered Level 3 measurements within the fair value hierarchy.

As a result of the Business Combination, the Company recognized additional earnout shares with performance conditions as a liability measured at fair value with subsequent changes in fair value recorded in the consolidated statement of operations for each reporting period. The earnout shares are valued using the Company’s stock price as of the valuation

date. The valuation methodology used is a Monte Carlo Simulation model (“MCS”) utilizing a Geometric Brownian motion process to capture meeting the various performance conditions. MCS is a technique that uses a stochastic process to create a range of potential future outcomes given a variety of inputs. Stochastic processes involve the use of both predictive assumptions (e.g., volatility, risk-free rate) and random numbers to create potential outcomes of value. MCS assumes that stock prices take a random walk and cannot be predicted; therefore, random number generators are used to create random outcomes for stock prices. The fair value measurements are considered Level 3 measurements within the fair value hierarchy.

The Company’s non-financial assets, which primarily consist of property and equipment, are not required to be carried at fair value on a recurring basis and are reported at carrying value. However, on a periodic basis or whenever events or changes in circumstances indicate that their carrying value may not be fully recoverable, these along with other non-financial instruments are assessed for impairment and, if applicable, written down to and recorded at fair value.

The beneficial conversion feature guidance requires recognition of the conversion option’s in-the-money portion, the intrinsic value of the option, in equity, with an offsetting reduction to the carrying amount of the instrument. The resulting discount is amortized as interest over the life of the instrument. When there is a subsequent change to the conversion ratio based on a future occurrence, the new conversion price may trigger the recognition of an additional beneficial conversion feature on occurrence.

As a result of the Business Combination, the unamortized portion of the beneficial conversion feature was recorded to additional paid-in capital.

The Company utilizes the Black-Scholes model to determine the fair value of the stock option awards, which requires the input of subjective assumptions. These assumptions include estimating (a) the length of time grantees will retain their vested stock options before exercising them for employees and the contractual term of the option for non-employees (“expected term”), (b) the volatility of the Company’s common stock price over the expected term, (c) expected dividends, and (d) the fair value of a share of common stock prior to the Business Combination. After the closing of the Business Combination, the Company’s board of directors determined the fair value of each share of common stock underlying stock-based awards based on the closing price of the Company’s common stock as reported by the NYSE on the date of grant. The Company has elected to recognize the adjustment to share-based compensation expense in the period in which ~~those temporary differences~~forfeitures occur.

The assumptions used in the Black-Scholes model are ~~expected~~management’s best estimates, but the estimates involve inherent uncertainties and the application of management judgment (see Note 10). As a result, if other assumptions had been used, the recorded share-based compensation expense could have been materially different from that recorded in the financial statements.

As a result of the Business Combination, the Company assumed the liability associated with the Gig warrants. The Company accounts for the warrants for shares of the Company’s common stock that are not indexed to its own stock as liabilities at fair value on the consolidated balance sheets. The warrants are subject to remeasurement at each balance sheet date and any change in fair value is recognized as a “(Gain) loss from change in fair value of warrant liabilities” in the consolidated statements of operations. The Company will continue to adjust the liability for changes in fair value until the

earlier of the exercise or expiration of the common stock warrants. At that time, the portion of the warrant liability related to the common stock warrants will be reclassified to “Additional paid-in capital”.

Research and development costs are primarily expensed when incurred and consist of personnel-related expenses including salaries, benefits, travel and stock-based compensation for personnel performing research and development activities; expenses related to materials, supplies and testing; and consulting and occupancy expenses. In addition, costs for certain property and equipment utilized for research and development are capitalized and depreciated to “Research and development” over the useful life of the asset based on the property and equipment policy discussed above.

Advertising costs are expensed when incurred and are included in “Selling, general and administrative” expenses and total $182 and $128 for the three months ended June 30, 2023 and 2022, and $395 and 244 for the six months ended June 30, 2023 and 2022, respectively.

Income taxes are accounted for using the asset and liability method which requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of ~~a change in~~temporary differences between the carrying amounts and the tax basis of other assets and liabilities. The Company provides for income taxes at the current and future enacted tax rates ~~is recognized~~and laws applicable in ~~income in the period that included the enactment date. Valuation allowances are established, when necessary, to reduce deferred tax assets to the amount expected to be realized.~~

each taxing jurisdiction. The Company ~~prescribes~~uses a ~~recognition threshold~~two-step approach for recognizing and ~~a measurement attribute for the financial statement recognition and measurement of~~measuring tax ~~positions~~benefits taken or expected to be taken in a tax ~~return. For those benefits to be recognized, a~~return and disclosures regarding uncertainties in income tax ~~position must be more-likely-than-not to be sustained upon examination by taxing authorities. There were no unrecognized tax benefits as of June 30, 2020.~~positions. The Company recognizes ~~accrued~~ interest and penalties related to ~~unrecognized tax benefits as~~ income tax ~~expense. No amounts were accrued~~matters in income tax expense in the consolidated statement of operations.

Basic earnings (loss) per share (“EPS”) are computed by dividing net earnings (loss) by the weighted average number of common shares outstanding for the ~~payment~~period. Diluted EPS attributable to common shareholders is computed by adjusting net earnings by the weighted average number of ~~interest~~common shares and ~~penalties~~potential common shares outstanding (if dilutive) during each period. Potential common shares include shares issuable upon exercise of stock options and vesting of restricted stock awards. Anti-dilutive securities are excluded from diluted EPS.

The Company applies the treasury stock method to account for the dilutive impact of its options, warrants and restricted stock units and the if converted method for its Convertible Note.

In June 2016, the Financial Accounting Standards Board issued Accounting Standards Update (“ASU”) 2016-13 related to the measurement of credit losses on financial instruments and has since modified the standard with several ASUs (collectively, the “credit loss standard”). The credit loss standard requires a financial asset (or a group of financial assets) measured at amortized cost basis to be presented at the net amount expected to be collected. The measurement of expected credit losses is based on relevant information about past events, including historical experience, current conditions and reasonable and supportable forecasts that affect the collectability of the reported amount. The credit loss standard took effect for public entities for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years. As amended in ASU 2019-10, for smaller reporting companies, the credit loss standard will take effect for fiscal years beginning after December 15, 2022, and for interim periods within those fiscal years. The adoption of this ASU will require a cumulative-effect adjustment to accumulated deficit as of the beginning of the first reporting period in which the guidance is effective (that is, a modified-retrospective approach). The Company adopted this standard on January 1, 2023, and this ASU did not have a material impact to the Company’s financial statements.

The Company reduced the cost of certain inventory to net realizable value by zero and $682 during the three months ended June 30, 2023 and 2022 and $2,864 and $777 for the six months ended June 30, 2023 and 2022, respectively, which was recorded in “Cost of revenues.”

The interest make-whole amount means, with respect to the conversion of the Convertible Note, in an amount denominated in U.S. dollars, the sum of all regularly scheduled interest payments, if any, due on such Convertible Note on each interest payment date occurring after the conversion date for such conversion and ~~three-fourths (3/4)~~on or before the maturity date; provided, however, that (A) for these purposes, the amount of ~~one redeemable warrant (a “Public Warrant”~~interest due on the interest payment date immediately after such conversion date will be deemed to be the following amount: any accrued and unpaid interest, if any, at such conversion date, plus any remaining amounts that would be owed to, but excluding, the maturity date in respect of such Convertible Note, including all regularly scheduled interest payments; and (B) if such conversion date occurs after the Company has sent a mandatory conversion notice, then the interest make-whole amount for such conversion shall be the sum of all regularly scheduled interest payments, if any, due on such Convertible Note on each interest payment date occurring after the conversion date for such conversion to, but excluding, the maturity date.

If the Company incurs other unpermitted indebtedness, it is required to redeem the Convertible Notes in full including outstanding principal and accrued and unpaid interest, plus a prepayment premium equal to the amount of interest which

would have accrued on the Convertible Notes through maturity (the “Redemption Feature”). ~~Each whole Public Warrant~~In addition, the Company is ~~exercisable for one share~~required to issue to the holders a fixed number of warrants to purchase shares of Common ~~Stock at a price~~Stock. The fixed number of ~~$11.50~~ ~~per full share.~~ ~~As a result, increments~~warrants will be based on the principal balance of ~~four Public~~the Convertible Notes, divided by $230.00 (“Redemption Warrants”). The Redemption Warrants ~~must~~will be ~~exercised in order to obtain whole~~exercisable from the date of repayment of the Convertible Notes through the original maturity date of the Convertible Notes.

If the number of outstanding shares of Common Stock ~~upon~~is increased by a stock split or other similar event, the number of shares issuable on exercise of each warrant shall be increased proportionately and the exercise price shall be decreased proportionately. Consequently, if the number of ~~the Public Warrants. The exercise price~~outstanding shares of ~~the Public Warrants may be adjusted in certain circumstances as discussed in Note 6.~~ ~~Under the terms~~Common Stock is decreased by a reverse stock split, consolidation, combination or reclassification of ~~the warrant agreement (the “Warrant Agreement”), the Company has agreed to use its best efforts to file a new registration statement under the Securities Act, following the completion~~shares of ~~the Company’s Business Combination.~~

No fractional shares will be issued upon exercise of the Public Warrants. If, upon exercise of the Public Warrants, a holder would be entitled to receive a fractional interest in a share, the Company will, upon exercise, round down to the nearest whole numberCommon Stock or other similar event, the number of shares of Common Stock issuable on exercise of each warrant shall be decreased proportionately and the exercise price shall be increased proportionately.

The Company has identified certain embedded derivatives related to beits Convertible Note. Since the Convertible Note has a conversion feature whereby the principal amount will convert into a variable number of shares based on the future trading price of the Company’s common stock, the conversion feature is recorded as a derivative liability. Therefore, the fair value of the convertible feature at inception on May 6, 2021 in the amount of $17,063 was recorded as a debt discount and an addition to “Derivative liability” on the consolidated balance sheets. The derivative liability is adjusted to fair value each reporting period, with the changes in fair value reported in “(Gain) loss from change in fair value of derivative liability” on the consolidated statements of operations.

The following table provides a reconciliation of the beginning and ending balances for the Convertible Note derivative liability measured at fair value using significant unobservable inputs (Level 3):

The Convertible Note warrants are considered free-standing instruments and meet the criteria for equity classification because they are indexed to the ~~Public Warrant holder. Each Public Warrant will become exercisable~~Company’s own stock and provide a fixed number of shares. Therefore, the fair value of

The fair value of the ~~Warrant Agreement,~~private placement warrants on May 6, 2021 in the amount of $1,253 was recorded as a “Warrant liability” and a reduction to “Additional paid-in capital” on the consolidated balance sheets. The change in fair value at each reporting date was recognized in “(Gain) loss from change in fair value of warrant liabilities” on the consolidated statements of operations. The fair value of the Convertible Note warrants on May 6, 2021 in the amount of $14,522 was recorded as a debt discount and an addition to “Additional paid-in capital” on the consolidated balance sheets.

In connection with the Business Combination, the stockholders approved the 2021 Equity Incentive Plan (the “2021 Plan”). The 2021 Plan provides the Company ~~has agreed~~the ability to ~~use its best efforts to file a new registration statement under the Securities Act, following the completion~~grant incentive stock options, non-qualified stock options, restricted stock awards, stock appreciation rights, restricted stock units, performance units, performance shares, cash-based awards and other stock-based awards. The purpose of the ~~Company’s initial Business Combination, for~~2021 Plan is to advance the ~~registration~~interests of the ~~shares of Common Stock issuable upon exercise~~Company and its stockholders by providing an incentive to attract, retain and reward persons for performing services and by motivating such persons to contribute to the growth and profitability of the ~~Warrants included in the Units~~Company and ~~Private Placement Units.~~

its subsidiaries. As of June 30, ~~2020,~~2023, there were ~~15,670,108 Warrants outstanding.~~

~~Stock-based Compensation~~

~~Also included in~~889,711 shares reserved and 428,167 shares available for grant under the ~~outstanding shares~~2021 Plan.

The legacy Lightning Systems 2019 Equity Incentive Plan (“2019 Plan”) provided for the grant of Common Stock are 15,000 shares issued in consideration of future services to the Insiders, who are non-employee consultants. These shares are subject to forfeiture if the individuals resign or are terminated for cause prior to the completionincentive stock options, non-qualified stock options, and other awards. As a result of the Business ~~Combination. If an initial~~Combination, the 2019 Plan was superseded by the 2021 Plan; therefore, no further awards will be granted under the 2019 Plan. In connection with the Business Combination, ~~occurs~~awards outstanding were converted into an option exercisable for common stock of the Company based on the Exchange Ratio. As of June 30, 2023, there were 75,103 stock options previously granted and ~~these shares have not been previously forfeited,~~unexercised under the 2019 Plan, which remain subject to the terms and conditions of the 2019 Plan.

To date, the Company has issued stock option and restricted stock unit (“RSU”) awards. The Company recognizes stock-based compensation expense based on the fair value of the ~~Common Stock on~~awards issued at the date of grant and amortized on a straight-line basis as the ~~shares vest will be~~employee renders services over the requisite service period. Forfeitures are accounted for as they occur by

reversing the expense previously recognized ~~as stock-based compensation in~~for non-vested awards that were forfeited during the ~~Company’s statements of operations and comprehensive income when the completion of the Business Combination becomes probable.~~

~~7. FAIR VALUE MEASUREMENTS~~

The fair value of the Company’s financial assets and liabilities reflects management’s estimate of amounts that the Company would have received in connection with the sale of the assets or paid in connection with the transfer of the liabilities in an orderly transaction between market participants at the measurement date. In connection with measuring the fair value of its assets and liabilities, the Company seeks to maximize the use of observable inputs (market data obtained from independent sources) and to minimize the use of unobservable inputs (internal assumptions about how market participants would price assets and liabilities). The following fair value hierarchy is used to classify assets and liabilities based on the observable inputs and unobservable inputs used in order to value the assets and liabilities:

~~Level 1:~~

Quoted prices in active markets for identical assets or liabilities. An active market for an asset or liability is a market in which transactions for the asset or liability occur with sufficient frequency and volume to provide pricing information on an ongoing basis.

~~Level 2:~~

Observable inputs other than Level 1 inputs. Examples of Level 2 inputs include quoted prices in active markets for similar assets or liabilities and quoted prices for identical assets or liabilities in markets that are not active.

~~Level 3:~~

~~Unobservable inputs which are supported by little or no market activity and which are significant to the fair value of the assets or liabilities.~~

period. The following table presents ~~information about~~ the ~~Company’s assets that are measured at fair value on a recurring basis~~stock-based compensation related to stock option and RSU awards for the periods presented:

The estimated unrecognized expense for stock options and RSUs not vested as of June 30, ~~2020,~~2023, which will be recognized over the remaining requisite service period, is as follows:

Stock option awards are issued to employees with an exercise price equal to the estimated fair market value per share at the date of grant and ~~indicates~~a term of 10 years. Stock option awards generally vest over 4 years. It is the ~~fair value hierarchy~~Company’s policy to issue new shares upon option exercise. Changes in the Company’s stock options for the six months ended June 30, 2023 are presented in the table below.

Changes in the status of the ~~valuation inputs~~Company’s non-vested stock option awards for the six months ended June 30, 2023 are presented in the table below.

The aggregate intrinsic value of options exercised were $60 and $106 during the three months ended June 30, 2023 and 2022, respectively.

The Company grants RSU awards to employees that generally vest over 3 years. RSU awards are valued based on the closing market price of the Company’s common stock on the grant date.

The Company has an employee-directed 401(k) savings plan (the “401(k) Plan”) for all eligible employees. Under the 401(k) Plan, employees may make voluntary contributions based on a percentage of their pretax income, subject to statutory limitations. The Company matches 100% for the first 3% of each employee’s contribution and 50% for the next 2% of each employee’s contribution. The Company’s cash contributions are fully vested upon the date of match. The Company made matching cash contributions of $240 and $200 for the three months ended June 30, 2023 and 2022, respectively, and $497 and $365 for the six months ended June 30, 2023 and 2022, respectively

The provision for income taxes is recorded at the end of each interim period based on the Company’s best estimate of its effective income tax rate expected to be applicable for the full fiscal year. There is no provision for income taxes because the Company ~~utilized to determine such fair value:~~

Description:

Level

June 30, 2020

Assets:

Cash and marketable securities held in Trust Account

1

$
202,007,715

has incurred taxable losses since inception. The ~~marketable securities held~~Company’s effective income tax rate was 0% for the three and six months ended June 30, 2023 and 2022 and the realization of any deferred tax assets is not more likely than not.

Basic income or loss per common share is computed by dividing net income or loss by the weighted average number of common shares outstanding during the period. Diluted income or loss per common share is computed by dividing net income or loss by the weighted average number of common shares outstanding, plus the issuance of potentially dilutive common shares that could result from the exercise of outstanding stock options and warrants, vesting of restricted stock and conversion of convertible notes. No potentially dilutive common shares are included in the ~~Trust Account~~computation of any diluted per share amount when a loss is reported, which was the case for the three and six months ended June 30, 2023 and 2022. The Company applied the treasury stock method to account for the dilutive impact of its options, warrants and restricted stock units and the if-converted method for its Convertible Note.

The following table reconciles the earnings (loss) and number of common shares used to calculate basic and diluted earnings per common share attributable to the Company’s shareholders:

All potentially dilutive common shares in the following table were excluded from the computation of diluted loss per share for the three and six months ended June 30, 2023 and 2022 because including them would have had an anti-dilutive effect due to losses reported during those periods.

The Company is party to firm purchase commitments with some of its suppliers. A firm purchase commitment represents an agreement that specifies all significant terms, including price and timing of the transactions, and includes a disincentive for non-performance that is sufficiently large to make performance probable. This disincentive is generally in the form of a take-or-pay provision, which requires the Company to pay for committed volumes regardless of whether the Company actually acquires the materials. The Company evaluates these agreements and records a loss, if any, on firm purchase commitments using the same lower of cost or market approach as that used to value inventory.

The Company also has other commitments, including marketing and software subscription agreements.

On March 9, 2023, the Company filed a lawsuit against Romeo Systems, Inc. and Nikola Corporation in the Larimer County District Court, Colorado (Case No. 2023CV30187) seeking damages for breach of contract and tortious interference related to the ~~Trust Account, which~~product supply agreement between the Company and Romeo dated July 13, 2020, arising from Romeo’s failure to deliver batteries under the agreement and for costs associated with a recall of the batteries. The Company initiated a voluntary recall after Romeo refused to take action as the supplier of the batteries. On June 28, 2023, the Company was ~~recorded~~awarded a default judgment in the ~~condensed balance sheet~~amount of $9,800 against Romeo. Romeo recently instituted an assignment for the benefit of creditors in ~~interest receivable~~California and the Company will file a claim for recovery in the proceeding. It is uncertain if the Company will receive any distribution of the claim. The Company will continue to pursue claims against Nikola in the lawsuit.

References ~~in this report (the “Quarterly Report”)~~ to “we,” “us,” “our” or the “Company” ~~refer~~are to ~~GigCapital3,~~Lightning eMotors, Inc. ~~References to our “management” or our “management team” refer to our officers and directors, references to~~, together with its wholly owned subsidiary, except where the ~~“Sponsor” refer to GigAcquisitions3, LLC, and references to the “Founder” refer to the Sponsor.~~context requires otherwise. The following discussion ~~and analysis of the Company’s financial condition and results of operations~~ should be read in conjunction with ~~the condensed~~our unaudited consolidated financial statements and related notes thereto included elsewhere in this report and our audited consolidated financial statements and the related notes ~~thereto contained elsewhere~~included in ~~this Quarterly Report. Certain information contained in~~our annual report on Form 10-K for the ~~discussion~~year ended December 31, 2022 filed with the Securities and ~~analysis set forth below~~Exchange Commission on March 13, 2023.

This quarterly report on Form 10-Q includes forward-looking statements ~~that involve risks and uncertainties.~~

~~Special Note Regarding Forward-Looking Statements~~

~~This Quarterly Report includes “forward-looking statements”~~ within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act ~~that~~of 1934, as amended (the “Exchange Act”). Our forward-looking statements include, but are not ~~historical facts, and involve risks and uncertainties that could cause actual results~~limited to, ~~differ materially from those expected and projected. All~~ statements other than statements of historical fact included in this Quarterly Report including, without limitation, statements in this “Management’s Discussion and Analysis of Financial Condition and Results of Operations”regarding our or our management team’s expectations, hopes, beliefs, intentions, or strategies regarding the ~~Company’s financial position, business strategy and the plans and objectives~~future. In addition, any statements that refer to projections, forecasts or other characterizations of ~~management for~~ future ~~operations,~~events or circumstances, including any underlying assumptions, are forward-looking statements. ~~Words such as “expect,~~The words “anticipate,” “believe,” ~~“anticipate,~~“continue,” ~~“intend,~~“could,” “estimate,” ~~“seek,~~“expect,” “intend,” “may,” “might,” “plan,” “possible,” “potential,” “predict,” “project,” “should,” “will,” “would” and similar ~~words and~~ expressions ~~are intended to~~may identify ~~such forward-looking statements. Such~~ forward-looking statements, ~~relate to future events or future performance,~~ but ~~reflect management’s current beliefs,~~the absence of these words does not mean that a statement is not forward-looking.

The forward-looking statements contained in this report are based on ~~information currently available. A~~our current expectations and beliefs concerning future developments and their potential effects on us. There can be no assurance that future developments affecting us will be those that we have anticipated. These forward-looking statements involve a number of ~~factors could cause actual events, performance~~risks, uncertainties (some of which are beyond our control) or ~~results to differ materially from the events, performance and results discussed in the forward-looking statements. For information identifying important factors~~other assumptions that ~~could~~may cause actual results or performance to ~~differ~~be materially different from those ~~anticipated~~expressed or implied by these forward-looking statements. These risks and uncertainties include, but are not limited to the risks described herein and in our annual report on Form 10-K, including, but not limited to: our ability to continue as a going concern; our ability to continue operations; our ability to become profitable; our ability to raise additional funds or find a strategic partner; our ability to service our debt; our ability to control costs of our operations; our ability to obtain sufficient supplies of chassis, motors, batteries and other critical components for the manufacture of our ZEVs and powertrains; an increase in the cost of raw materials due to inflation; the impact of inflation and rising rates on customers’ decisions to purchase ZEVs; the number of orders placed by our commercial fleet customers; the market acceptance of our products; the availability, amount and disbursement of government grants, loans or other incentives; and other risks and uncertainties.

Should one or more of these risks or uncertainties materialize, or should any of our assumptions prove incorrect, actual results may vary in material respects from those projected in these forward-looking statements. These forward-looking statements ~~please refer to the Risk Factors section~~speak only as of the Company’s final prospectus for our initial public offering filed with the U.S. Securities and Exchange Commission (the “SEC”). The Company’s securities filings can be accessed on the EDGAR section of the SEC’s website at www.sec.gov. Except as expressly required by applicable securities law, the Company disclaims any intention ordate hereof. We undertake no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or ~~otherwise.~~

otherwise, except as may be required by law.

We are a ~~newly organized Private-to-Public Equity (PPE) company, also known~~leading designer and manufacturer of zero-emission commercial trucks and buses and charging infrastructure solutions for fleets, large enterprises, original equipment manufacturers, and governments. Our product offerings range from cargo vans, transit and shuttle buses, school buses, specialty work trucks, ambulances and electric powertrains for school buses, transit buses and motorcoaches. Our product solutions help our customers reduce their greenhouse gas emissions, lower operating costs and improve energy efficiency.

We started in 2008 as a ~~blank check company or special purpose acquisition vehicle, incorporated~~manufacturer of hybrid systems for commercial vehicles. In 2017, we redirected our efforts to focus exclusively on the market opportunity in ZEVs. We successfully and quickly adapted to developing ZEVs by leveraging nearly 10 years of extensive knowledge and production infrastructure for the hybrid systems. Our 14-year track-record of research and development, significant customer engagement and validation, and focus on building highly customized vehicles has allowed us to create an electric solution that we believe remains ahead of the competition in terms of technology, reliability, and versatility. We combine internally-developed, optimized modular software, which can be used in multiple platforms and applications, with hardware designs that allows us to address a diverse range of opportunities in the State of Delaware and formed for the purpose of acquiring, engaging in a share exchange, share reconstruction and amalgamation with, purchasing all or substantially all of the assets of, or engaging in any other similar business combination with one or more businesses or entities. We have not identified an acquisition target. We intend to effectuate our initial Business Combination using cash from the proceeds from the sale of units (the “Units”) in our initial public offering (the “Offering”), the sale of the units (the “Private Placement Units”) to our Founder and Underwriters, the sale of common stock to our Founder, our common equity or any preferred equity that we may create in accordance with the terms of our charter documents, debt, or a combination of cash, common or preferred equity and debt. The Units sold in the Offering each consisted of one share of common stock, and three-fourths (3/4) of one redeemable warrant to purchase our common stock (no fractional shares will be issued upon exercise of the warrants). The Private Placement Units were substantially similar to the Units sold in the Offering, but for certain differences in the warrants included in each of them. For clarity, the warrants included in the Units are referred to herein as the “public warrants”, and the warrants included in the Private Placement Units are referred to herein as the “private warrants”.

~~The issuance of additional shares of common stock or the creation of one or more classes of preferred stock during our initial Business Combination:~~

~~may significantly dilute the equity interest of investors in this Offering who would not have pre-emption rights in respect of any such issue;~~

may subordinate the rights of holders of common stock if the rights, preferences, designations and limitations attaching to the preferred shares are senior to those afforded our shares of common stock;

could cause a change in control if a substantial number of shares of common stock are issued, which may affect, among other things, our ability to use our net operating loss carry forwards, if any, and could result in the resignation or removal of our present officers and directors;

~~may have the effect of delaying or preventing a change of control of us by diluting the share ownership or voting rights of a person seeking to obtain control of us; and~~

~~may adversely affect prevailing market prices for our shares of common stock.~~

~~Similarly, if we issue debt securities or otherwise incur significant indebtedness, it could result in:~~

~~default and foreclosure on our assets if our operating revenues after our initial Business Combination are insufficient to repay our debt obligations;~~

acceleration of our obligations to repay the indebtedness even if we make all principal and interest payments when due if we breach certain covenants that require the maintenance of certain financial ratios or reserves without a waiver or renegotiation of that covenant;

~~our immediate payment of all principal and accrued interest, if any, if the debt is payable on demand;~~

~~our inability to obtain necessary additional financing if any document governing such debt contains covenants restricting our ability to obtain such financing while the debt security is outstanding;~~

~~our inability to pay dividends on our shares of common stock;~~

using a substantial portion of our cash flow to pay principal and interest on our debt, which will reduce the funds available for dividends on our common stock if declared, expenses, capital expenditures, acquisitions and other general corporate purposes;

~~limitations on our flexibility in planning for and reacting to changes in our business and in the industry~~markets in which we ~~operate;~~

~~increased vulnerability~~operate in a cost-effective manner. Our flexible approach provides a significant time-to-market advantage. We believe we are the only full-range manufacturer of Class 3 to ~~adverse changes~~7 ZEVs in ~~general economic, industry~~the United States providing end-to-end electrification solutions including advanced analytics software and ~~competitive conditions and adverse changes in government regulation; and~~

limitations on our ability to borrow additional amounts for expenses, capital expenditures, acquisitions, debt service requirements, execution of our strategy and other purposes and other disadvantages comparedmobile charging solutions to our ~~competitors who have less debt.~~

customers.

33

~~We expect to incur significant costs in the pursuit~~

Table of ~~our acquisition plans. We cannot assure you that our plans to raise capital or to complete our initial Business Combination will be successful.~~

~~Results of Operations and Known Trends or Future Events~~

We have neither engaged in any operations nor generated any revenues to date. For the period from February 3, 2020 (date of inception) through June 30, 2020, our only activities have been organizational activities, those necessary to prepare for the Offering and to identify a target business for the Business Combination. We do not expect to generate any operating revenues until after completion of our initial Business Combination. We expect to generate non-operating income in the form of interest income on cash and marketable securities held in the Trust Account at Oppenheimer & Co., Inc. in New York, New York with Continental Stock Transfer & Trust Company acting as trustee, which was funded after the Offering to hold an amount of cash and marketable securities equal to that raised in the Offering. There has been no significant change in our financial or trading position and no material adverse change has occurred since the date of our audited balance sheet of May 18, 2020 as filed with the SEC on May 26, 2020. We expect to incur increased expenses as a result of being a public company (for legal, financial reporting, accounting and auditing compliance), as well as for due diligence expenses.

~~For~~Contents

Recent Developments

Production. During the three months ended June 30, ~~2020,~~2023 and 2022, we produced 46 and 74 units, respectively, consisting of zero-emission vehicles, or ZEVs, mobile battery vehicle chargers and separately sold zero-emission powertrains. During the three months ended June 30, 2023, we sold 70 units compared to the sale of 36 units in the same period in 2022. During the six months ended June 30, 2023 and 2022, we produced 99 and 144 units, respectively. During the six months ended June 30, 2023, we sold 99 units compared to the sale of 104 units in the same period in 2022. As of August 4, 2023, we had ~~net loss~~over 600 vehicles on the road with over 4.9 million miles driven. We are currently focused on increasing production of ~~$131,608,~~our ZEVs and our mobile battery vehicle charger, reducing costs, increasing the affordability and efficiency of our ZEVs, and bringing new products to market, such as ZEV4 work trucks.

Orders. In May 2023, we signed a contract with Macnab EV Sales Corp. to deliver 126 ZEVs to the leading Canadian commercial vehicle distributor by the end of 2023. Deliveries of ZEV3 vans to Macnab have already begun. The full order of 126 vehicles includes ZEV3 cargo and passenger van configurations and ZEV4 shuttle buses.

Reverse Stock Split.We effected a 1-for-20 reverse stock split, or the Reverse Stock Split, of our issued and outstanding shares of common stock, par value $0.0001 per share, effective as of 5:00 p.m. Eastern Time on April 27, 2023. As a result of the Reverse Stock Split, every twenty shares of common stock issued and outstanding were automatically reclassified into one share of common stock. All share and per share amounts were retroactively adjusted for all periods presented to give effect to the Reverse Stock Split, including reclassifying an amount equal to the reduction in par value of our common stock to additional paid-in capital.

Material Trends and Uncertainties

Macroeconomic Factors. The impact of current macroeconomic conditions on our business - including slowed economic growth or the potential for a recession, increasing inflation and interest rates which ~~consisted~~affect the demand of ~~operating expenses~~our ZEVs, supply chain constraints, and geopolitical events - is uncertain. In addition, although the impact is lessening, the extent to which the effects of ~~$146,326~~the COVID-19 pandemic may impact our business in future periods remains uncertain and unpredictable. Our outlook for future growth in ZEVs depends upon the various economic and regulatory conditions, and on our ability to manage through supply chain issues that have, and will continue to, limit the level to which we can increase output in the near term. Our long-term outlook remains positive as we believe the adoption of alternative fuel vehicles and the electric vehicle market will continue to grow.

Ability to Continue as a ~~provision~~Going Concern.As discussed herein, we have suffered recurring losses from operations and there is substantial doubt about our ability to continue as a going concern. Our continuation as a going concern is dependent upon us attaining and maintaining profitable operations and/or raising additional capital from equity offerings, debt financings or other capital markets transactions, collaborations, strategic partnerships or licensing arrangements. We have been working with financial advisors to assist us in identifying strategic partners and financing to fund operations and to take actions to maximize our liquidity. If capital is not available to us when, and in the amounts needed, we could be required to liquidate inventory, cease or curtail operations, or seek protection under applicable bankruptcy laws or similar state proceedings. There can be no assurance that we will be able to raise the capital we need to continue our operations.

Availability of grant funding. Many of our customers utilize state and federal incentive programs to offset the higher initial costs of electric vehicles, as well as to fund the installation of charging equipment. In connection with the new tax credits for ~~income taxes~~certain commercial EVs established by the Inflation Reduction Act of ~~$6,259~~2022, we have been transitioning some of our efforts towards larger ZEVs that qualify for the larger tax credits. The IRS is still in the process of releasing further guidance on specific aspects of the aforementioned credits. The announcement of the IRA and the delay in receiving adequate IRS guidance as to the roll-out of the new tax credits has slowed order volumes thus far in 2023 and increased customer buying decision cycle times, as many existing or potential customers are waiting to place orders until they are certain of the amount of tax credits available per ZEV. In addition, many customers are evaluating the size and type of ZEV they intend to purchase because the amount of the tax credit depends on the weight of the vehicle, among other factors. Furthermore, other government programs, such as the FTA's Low- and No-Emission Vehicle Program, the Colorado Electric School Bus Grant Program or certain other state programs, recently announced new funding and are in the process of making these funds available for eligible purchases. Until these processes are established, we believe, customer orders may be delayed.

Supply-Chain challenges. We have been experiencing significant delivery delays from our suppliers since April 2020. In addition, we often do not get informed of delivery delays until or after the expected delivery dates and have, at times, also

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experienced deliveries in advance of expected delivery dates without prior notice (for orders that were ~~partially~~previously delayed), which does not allow for adequate planning. We have also been experiencing shortages of chassis and other components. We have increased our raw material inventories and added new suppliers. However, adding new suppliers, especially for chassis, increases cost and delays production. We expect supply chain challenges will continue for the foreseeable future. As a result of these challenges, we are carefully monitoring our inventory of chassis, batteries, motors and other raw materials to optimize cost, minimize supply chain issues. We have also entered into multi-year minimum purchase commitments with some of our suppliers of critical components. As of June 30, 2023, the minimum purchase commitment for the next twelve months is $40.6 million under these agreements. However, we are constantly evaluating our commitments and are currently in negotiations to either blend and extend or terminate some of our future commitments to address supply chain constraints and costs.

Inflation and interest rates. We are experiencing cost increases due to inflation resulting from various supply chain disruptions and general global economic conditions. The cost of raw materials, manufacturing equipment, labor and shipping and transportation has increased considerably. We expect higher levels of inflation to persist for the foreseeable future. If we are unable to fully offset higher costs through price increases or other measures, we could experience an adverse impact to our business, prospects, financial condition, results of operations, and cash flows. Interest rates have also increased considerably. The increase in inflation and interest rates impacts the demand for our ZEVs, as customers may delay purchasing ZEVs and/or have difficulty financing their ZEV purchases. Rising interest rates also present a recent challenge impacting the U.S. economy and could make it more difficult for us to obtain financing on acceptable terms, if at all, in the future.Additionally, the general consensus among economists suggests that we should expect a higher recession risk to continue over the next year, which, together with the foregoing, could result in further economic uncertainty and volatility in the capital markets in the near term, and could negatively affect our operations. Furthermore, such economic conditions have produced downward pressure on share prices.

Ability to Attract New Customers and Customer Demand. Our growth will depend in large part on our ability to attract new customers. We have invested heavily in developing our ZEVs and electric powertrains and plan to continue to do so. We anticipate that our sales activities will lead to additional orders and deliveries, and, as a result, increase our base of customers. An inability to attract new customers would substantially impact our ability to grow revenue or improve our financial results. Further, we often receive binding and non-binding purchase orders from customers that are contingent on various factors, such as completing a successful pilot program, obtaining third-party financing or obtaining government grants, such as HVIP. In addition, some customers are interested in future products, not yet in our production. While we continuously strive to expand our product catalog, developing new platforms takes a significant amount of time and expense, such as engineering work, sourcing new suppliers, marketing, testing and quality control. In addition, orders may be delayed for a number of reasons, many of which are beyond our control, including supplier delays, which may cause delays in our manufacturing process, or delays in customers obtaining financing. As a result, any such orders may not result in actual revenue in the near term or at all. Accordingly, revenue estimates and the amount and timing of work expected to be performed at the time the estimate of order backlog is developed is subject to change.

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Results of Operations

Comparison of Three and Six Months Ended June 30, 2023 and 2022

Revenue

The following table compares revenue for the three and six months ended June 30, 2023 and 2022:


	Three Months Ended June 30,
	2023		2022		Change		% Change
	(dollar amounts in thousands)
Gross Revenue	$	8,170	$	3,536	$	4,634	131	%
Customer refunds(1)	(254)		—		$	(254)	nm*
Revenue, net of customer refunds	$	7,916	$	3,536	$	4,380	124	%
ZEV units sold	70		36		34		94	%


	Six Months Ended June 30,
	2023		2022		Change		% Change
	(dollar amounts in thousands)
Gross Revenue	$	11,736	$	8,948	$	2,788	31	%
Customer refunds(1)	(2,509)		—		$	(2,509)	nm*
Revenue, net of customer refunds	$	9,227	$	8,948	$	279	3	%
ZEV units sold	99		104		(5)		(5)	%

(1) Customer refunds are related to the ZEV4 recall on vehicles that were manufactured with Romeo battery packs.

Revenue is primarily derived from the sale of our ZEVs. Revenue, net of customer refunds increased by $4.4 million, or 124%, during the three months ended June 30, 2023, due to an increase in ZEV sales and an increase in the average sales price by unit. Excluding the adjustment for customer refunds, revenue increased by $4.6 million, or 131%, during the three months ended June 30, 2023.

Revenue, net of customer refunds increased by $0.3 million, or 3%, during the six months ended June 30, 2023 due to an increase in average sales price, offset by a decrease in ZEV sales and by refunds of the purchase price made to customers for the ZEV4 manufactured with Romeo batteries in connection with the Romeo recall. We will seek to recover the costs and expenses associated with the recall from Romeo. Excluding the adjustment for customer refunds, revenue increased by $2.8 million, or 31%, during the six months ended June 30, 2023.

Cost of Revenues, Gross Loss and Gross Margin

The following table compares the cost of revenues, gross loss and gross margin for the three and six months ended June 30, 2023 and 2022:

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	Three Months Ended June 30,
	2023			2022			Change		% Change
	(dollar amounts in thousands)
Cost of revenues	$	12,933		$	4,889		$	8,044	165	%
Gross loss	$	(5,017)		$	(1,353)		$	(3,664)	(271)	%
Gross margin	(63)		%	(38)		%

	Six Months Ended June 30,
	2023			2022			Change		% Change
	(dollar amounts in thousands)
Cost of revenues	$	21,085		$	12,611		$	8,474	67	%
Gross loss	$	(11,858)		$	(3,663)		$	(8,195)	(224)	%
Gross margin	(129)		%	(41)		%

Cost of revenues includes direct costs (parts, material, and labor); indirect manufacturing costs (manufacturing overhead, depreciation and plant operating lease expense); shipping, field services, logistics and warranty costs.

Cost of revenues increased during the three and six months ended June 30, 2023 due to an increase in the lower of cost or net realizable value expense associated with finished goods, an increase in inventory obsolescence expense, as well as an increase in costs per unit due to an increase in raw material costs and factory overhead and other fixed costs during the six months ended June 30, 2023 compared to the prior year period.

Research and Development

The following table compares research and development expense for the three and six months ended June 30, 2023 and 2022:


	Three Months Ended June 30,
	2023		2022		Change		% Change
	(dollar amounts in thousands)
Research and development	$	1,381	$	1,810	$	(429)	(24)	%

	Six Months Ended June 30,
	2023		2022		Change		% Change
	(dollar amounts in thousands)
Research and development	$	3,468	$	3,752	$	(284)	(8)	%

Research and development expenses consist primarily of costs incurred for the discovery and development of our zero-emission powertrain solutions and the production thereof, which principally include personnel-related expenses including salaries, benefits, travel and stock-based compensation, for personnel performing research and development activities; expenses related to materials, supplies and testing; and consulting and occupancy expenses.

Research and development expenses decreased during the three and six months ended June 30, 2023 primarily due to a decrease in our engineering headcount year-over-year.

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Selling, General and Administrative

The following table compares selling, general and administrative expense for the three and six months ended June 30, 2023 and 2022:


	Three Months Ended June 30,
	2023		2022		Change		% Change
	(dollar amounts in thousands)
Selling, general and administrative	$	13,025	$	12,559	$	466	4	%

	Six Months Ended June 30,
	2023		2022		Change		% Change
	(dollar amounts in thousands)
Selling, general and administrative	$	27,873	$	24,158	$	3,715	15	%

Selling, general and administrative expenses consist of personnel-related expenses for our corporate, executive, engineering, finance, sales, marketing, program management support, and other administrative functions, expenses for outside professional services, including legal, audit and accounting services, as well as expenses for information technology, facilities, insurance, depreciation, amortization, travel, and sales and marketing costs. Personnel-related expenses consist of salaries, payroll taxes, benefits, and stock-based compensation.

Selling, general and administrative expenses remained flat during the three months ended June 30, 2023. Selling, general and administrative expenses increased by $3.7 million, or 15%, during the six months ended June 30, 2023, primarily due to an increase in headcount in sales and administration staff.

Interest Expense, net

The following table compares interest expense for the three and six months ended June 30, 2023 and 2022:


	Three Months Ended June 30,
	2023		2022		Change		% Change
	(dollar amounts in thousands)
Interest expense, net	$	3,492	$	3,849	$	(357)	(9)	%

	Six Months Ended June 30,
	2023		2022		Change		% Change
	(dollar amounts in thousands)
Interest expense, net	$	6,621	$	7,710	$	(1,089)	(14)	%

Interest expense consists of interest paid on notes payable, the amortization of debt issuance costs, the amortization of debt discounts attributable to the bifurcation of warrants issued, and amortization of an embedded conversion feature. The notes payable included, over the periods presented, the Convertible Note and the Facility, as described in more detail in Note 7 to the consolidated financial statements.

Interest expense for the three months ended June 30, 2023 included $3.1 million of accrued interest and discount amortization related to the Convertible Note, $0.1 million of interest expense associated with the Facility and $0.5 million of interest expense associated with the PPA, offset by $0.2 million of interest income on ~~marketable securities held in~~our cash equivalents. Interest expense for the ~~Trust Account of $20,977.~~

~~For the period from February 3, 2020 (date of inception) through~~three months ended June 30, ~~2020, we had a net loss~~2022 included $3.9 million of ~~$157,396, which consisted~~accrued interest and discount amortization related to the Convertible Note and $0.1 million of ~~operating expenses of $172,114 and a provision for income taxes of $6,259 that were partially~~interest expense associated with the Facility, offset by $0.2 million of interest income on ~~marketable securities held~~our cash equivalents. Interest expense for the six months ended June 30, 2023 included $6.5 million of accrued interest and discount amortization related to the Convertible Note, $0.2 million of interest expense associated with the Facility and $0.5 million of interest expense associated with the PPA, offset by $0.6 million of interest income on our cash equivalents. Interest expense for the six months ended June 30, 2022 included $7.7 million of accrued interest and discount amortization related to the Convertible Note and $0.2 million of interest expense associated with the Facility,

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offset by $0.2 million of interest income on our cash equivalents.The decrease in interest expense for the three and six and months ended June 30, 2023 was due to the decrease in the ~~Trust Account of $20,977.~~

~~Liquidity and Capital Resources~~

On May 18, 2020, we consummated the closing of the Offering with the delivery of 20,000,000 Units at a price of $10.00 per unit, generating gross proceeds of $200,000,000. Simultaneously with the closing of the Offering, we consummated the closing of the Private Placement with the sale of 650,000 Private Placement Units at a price of $10.00 per unit to our Founder and sale of 243,479 Private Placement Units at a price of $10.00 per unit to the Underwriters, generating aggregated gross proceeds of $8,934,790.

Following the closing of the Offering and the Private Placement, a total of $202,000,000 was placed in the Trust Account. We incurred $12,785,179 in offering related costs, including $4,000,000 of underwriting fees, $8,000,000 of deferred underwriting fees, and $785,179 of other costs. Subsequently to the closing of the Offering, offering costs of $785,179 accrued for at the closing of the Offering were reduced to $747,907, of which $100,000 was included in accrued liabilities in our condensedConvertible Note balance ~~sheet~~from $87.8 million as of June 30, ~~2020. Therefore, total transaction~~2022 to $59.9 million as of June 30, 2023.

Change in Fair Value of Warrant Liabilities

The following table compares the change in fair value of warrant liabilities for the three and six months ended June 30, 2023 and 2022:


	Three Months Ended June 30,
	2023		2022		Change
	(dollar amounts in thousands)
Gain from change in fair value of warrant liabilities	$	(44)	$	(1,126)	$	1,082

	Six Months Ended June 30,
	2023		2022		Change
	(dollar amounts in thousands)
Gain from change in fair value of warrant liabilities	$	(50)	$	(1,314)	$	1,264

The change in fair value of the warrant liabilities for the three and six months ended June 30, 2023 and June 30, 2022 reflect the impact of the marking-to-market of the warrant liabilities.

Change in Fair Value of Derivative Liability

The following table compares the change in fair value of derivative liability embedded in the Convertible Note for the three and six months ended June 30, 2023 and 2022:


	Three Months Ended June 30,
	2023		2022		Change
	(dollar amounts in thousands)
Gain from change in fair value of derivative liability	$	(24)	$	(10,087)	10,063

	Six Months Ended June 30,
	2023		2022		Change
	(dollar amounts in thousands)
Gain from change in fair value of derivative liability	$	(63)	$	(12,642)	12,579

The changes in fair value of the derivative liability for the three and six months ended June 30, 2023 and June 30, 2022 reflect the impact of the marking-to-market of the underlying derivative embedded in the Convertible Note.

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Change in Fair Value of Earnout Liability

The following table compares the change in fair value of earnout liability for the three and six months ended June 30, 2023 and 2022:


	Three Months Ended June 30,
	2023		2022		Change
	(dollar amounts in thousands)
Gain from change in fair value of earnout liability	$	(1,413)	$	(44,131)	$	42,718

	Six Months Ended June 30,
	2023		2022		Change
	(dollar amounts in thousands)
Gain from change in fair value of earnout liability	$	(1,819)	$	(50,303)	$	48,484

The changes in fair value of the earnout liability for the three and six months ended June 30, 2023 and June 30, 2022 reflect the impact of the marking-to-market of the earnout shares.

Non-GAAP Financial Measures

In addition to our results determined in accordance with GAAP, we believe the following non-GAAP measures, as defined in Item 10(e) of Regulation S-K, are useful in evaluating our operational performance. We use the following non-GAAP financial information among other operational metrics to evaluate our ongoing operations and for internal planning and forecasting purposes. We believe that non-GAAP financial information, when taken collectively, may be helpful to investors in assessing our operating performance. The presentation of non-GAAP financial information should not be considered in isolation or as a substitute for, or superior to, the financial information prepared and presented in accordance with GAAP.

EBITDA and Adjusted EBITDA

We define EBITDA as net income (loss) before depreciation and amortization and interest expense. We define adjusted EBITDA as net income (loss) before depreciation and amortization, interest expense, stock-based compensation, gains or losses related to the change in fair value of warrant, derivative and earnout share liabilities and other non-recurring costs ~~amounted~~determined by management, such as gains or losses on extinguishment of debt and losses related to ~~$12,747,907.~~

the Romeo battery recall. We believe EBITDA and adjusted EBITDA are meaningful metrics intended to supplement measures of our performance that are neither required by, nor presented in accordance with, GAAP. We believe that using EBITDA and adjusted EBITDA provides an additional tool for investors to use in evaluating ongoing operating results and trends while comparing our financial measures with those of comparable companies, which may present similar non-GAAP financial measures to investors. However, you should be aware that when evaluating EBITDA and adjusted EBITDA we may incur future expenses similar to those excluded when calculating these measures. In addition, our presentation of these measures should not be construed as an inference that our future results will be unaffected by unusual or non-recurring items. Our computation of EBITDA and adjusted EBITDA may not be comparable to other similarly titled measures computed by other companies, because all companies may not calculate EBITDA and adjusted EBITDA in the same fashion.

Because of these limitations, EBITDA and adjusted EBITDA should not be considered in isolation or as a substitute for performance measures calculated in accordance with GAAP. We compensate for these limitations by relying primarily on our GAAP results and using EBITDA and adjusted EBITDA on a supplemental basis. No undue reliance should be placed on these non-GAAP measures.

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The following table reconciles net income (loss) to EBITDA and adjusted EBITDA for the three and six months ended June 30, 2023 and 2022:


	Three Months Ended June 30,				Six Months Ended June 30,
	2023		2022		2023		2022
Net income (loss)	$	(21,448)	$	35,738	$	(44,883)	$	24,982
Adjustments:
Depreciation and amortization	681		407		1,213		768
Interest expense, net	3,492		3,849		6,621		7,710
EBITDA	$	(17,275)	$	39,994	$	(37,049)	$	33,460
Stock-based compensation expense	1,359		1,436		2,801		2,408
(Gain) loss from change in fair value of warrant liabilities	(44)		(1,126)		(50)		(1,314)
(Gain) loss from change in fair value of derivative liability	(24)		(10,087)		(63)		(12,642)
(Gain) loss from change in earnout liability	(1,413)		(44,131)		(1,819)		(50,303)
(Gain) loss on extinguishment of debt	—		—		(2,965)		—


Romeo battery recall	254		—		2,509		—
Adjusted EBITDA	$	(17,143)	$	(13,914)	$	(36,636)	$	(28,391)

Adjusted Revenue

Adjusted revenue is defined as revenue before customer refunds. The following table reconciles revenue, net of customer refunds and adjusted revenue for the three and six months ended June 30, 2023 and 2022:


	Three Months Ended June 30,				Six Months Ended June 30,
	2023		2022		2023		2022
Revenue, net of customer refunds	$	7,916	$	3,536	$	9,227	$	8,948
Customer refunds	254		—		2,509		—
Adjusted Revenue	$	8,170	$	3,536	$	11,736	$	8,948

Liquidity and Going Concern

Since our inception, we have financed our operations primarily from debt financing and the sales of common and convertible preferred shares.

In accordance with the ASC 205-40, Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern, (“ASC 205-40”), we have evaluated whether there are conditions and events, considered in the aggregate, that raise substantial doubt about our ability to continue as a going concern within one year after the date that the consolidated financial statements are issued.

As of June 30, ~~2020,~~2023, we ~~held~~had $12,620 in cash and ~~marketable securities in the amount~~cash equivalents and an accumulated deficit of $202,007,715 (including $7,715 of interest earned) in the Trust Account and interest receivable of $13,262. The marketable securities consisted of money market funds meeting certain conditions under Rule 2a-7 under the Investment Company Act of 1940 which invest only in direct U.S. government obligations. Interest income earned from the funds held in the Trust Account may be used by us to pay taxes.$211,277. For the ~~period from February 3, 2020 (date of inception) through~~six months ended June 30, ~~2020, we did not withdraw any funds from the interest earned on the Trust Account.~~

~~For the period February 3, 2020 (date of inception) through June 30, 2020,~~2023, our net loss amounted to $44,883 and cash used in operating activities was ~~$354,812, consisting~~$43,700. We had positive working capital of ~~a net loss~~$11,876 as of ~~$157,396~~June 30, 2023. The current and ~~interest earned~~historical operating cash flows, current cash and working capital balances, and forecasted obligations were considered in connection with management’s evaluation of our ongoing liquidity. However, we will require additional capital to fund our operations. Our ability to access capital is critical. Until we can generate sufficient cash flow from operations, we expect to finance our operations equity offerings, debt financings or other capital markets transactions, collaborations, strategic partnerships or licensing arrangements. The amount and timing of future funding requirements depend on ~~marketable securities held~~many factors, including the pace and results of development efforts and our ability to scale our operations. We have been working with financial advisors to assist us in ~~the Trust Account of $20,977 that were partially offset by decrease in net operating assets~~identifying strategic partners and liabilities of $176,439, including reduction in our prepaid operating expenses of $136,648 and other non-current assets of $101,834 that were partially offset by increase in accounts payable, including payablefinancing to ~~related parties, and accrued liabilities of $55,784, and income taxes payable of $6,259.~~

We intend to use substantially all of the funds held in the Trust Account, including any amounts representing interest earned on the Trust Account (which interest shall be net of taxes payable by us), to acquire a target business or businesses to complete our initial Business Combinationfund operations and to ~~pay~~take actions to maximize our expenses relating thereto. We may withdraw interest to pay taxes. We estimate our annual franchise tax obligations to be approximately $200,000. Our annual income tax obligations will depend on the amount of interest and other income earned on the amounts held in the Trust Account. To the extent that ourliquidity. If capital ~~stock~~ is ~~used in whole or in part as consideration to affect our initial Business Combination, the remaining proceeds held in the Trust Account as well as any other net proceeds~~ not expended will be used as working capital to finance the operations of the target business or businesses. Such working capital funds could be used in a variety of ways including continuing or expanding the target business’ operations, for strategic acquisitions and for marketing, research and development of existing or new products. Such funds could also be used to repay any operating expenses or finders’ fees which we had incurred prior to the completion of our initial Business Combination if the funds available to us ~~outside~~when, and in the amounts needed, we could be required to liquidate inventory, cease or curtail operations, or seek

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protection under applicable bankruptcy laws or similar state proceedings. There can be no assurance that we will be able to raise the ~~Trust Account were insufficient~~capital we need to ~~cover~~continue our operations.

We have secured and intend to employ various strategies to obtain the required funding for future operations such ~~expenses.~~

as accessing capital through our ELOC Agreement with Lincoln Park Capital, LLC or the Pre-Paid Advance Agreement with Yorkville. However, the ability to access the ELOC Agreement is dependent on our common stock trading volumes and the market price of our common stock, which cannot be assured, and as a result cannot be included as sources of liquidity for our ASC 205-40 analysis. As of June 30, ~~2020,~~2023 and through the date of this filing, we ~~had cash~~have not sold any shares of ~~$1,957,071 held outside~~common stock to Lincoln Park under the ~~Trust Account.~~ELOC Agreement other than the commitment shares. We ~~believe~~agreed with Yorkville that we will not utilize the ~~proceeds not held in~~ELOC while there are outstanding advances without Yorkville’s consent.

Due to uncertainties discussed above, there is substantial doubt about our ability to continue as a going concern through the ~~Trust Account will be sufficient to allow us to operate for at least 18~~next twelve months from the ~~closing~~ date of the Offering, assuming that a Business Combination is not consummated during that time. Over this time period, we intend to use these funds primarily for identifying and evaluating prospective acquisition candidates, performing business due diligence on prospective target businesses, traveling to and from the offices, plants or similar locations of prospective target businesses, reviewing corporate documents and material agreements of prospective target businesses, selecting the target business to acquire and structuring, negotiating and consummating the Business Combination.

~~If our estimates~~issuance of the ~~costs~~consolidated financial statements contained herein.

Material Cash Requirements

From time to time in the ordinary course of ~~undertaking in-depth due diligence~~business, we enter into agreements with vendors for the purchase of components and ~~negotiating~~raw materials to be used in the manufacture of our ~~initial Business Combination are less than~~products. To provide flexibility in our development and production plan and opportunities to renegotiate pricing, we generally do not have binding and enforceable purchase orders beyond the ~~actual amount necessary~~near term. However, in order to ~~do so, we may have insufficient funds available to operate our business prior~~secure raw materials vital to our ~~initial Business Combination. Moreover,~~products, we ~~may need~~have entered into multi-year minimum purchase commitments with some of our suppliers. If we fail to ~~obtain~~meet the minimum purchase commitments, we must pay a penalty. As of June 30, 2023, the minimum purchase commitment for the next twelve months is $41.8 million million under these agreements. However, we are currently in negotiations with certain suppliers to either blend and extend or terminate some of our future commitments due to supply chain constraints and cost increases for both parties. See Note 13 to the consolidated financial statements for additional ~~financing either~~information.

Our capital expenditures are typically difficult to ~~consummate~~project beyond the short term given potential supply chain constraints and market conditions. We estimate our ~~initial Business Combination or because~~total capital expenditures for the year 2023 to be between $5.0 and $8.0 million for development and production activities.

Debt

As of June 30, 2023, we ~~become~~had outstanding $59.9 million of principal indebtedness associated with our Convertible Note, which matures on May 15, 2024. We are obligated to ~~redeem~~make semi-annual interest payments of $2.3 million in May and November through maturity based on an annual interest rate of 7.5%.

On February 10, 2023, we completed an exchange with a ~~significant number~~holder of the outstanding Convertible Notes via privately negotiated exchange agreements, pursuant to which the holder agreed to exchange $3.5 million in aggregate principal amount of the Convertible Notes at a discount of 95% of par for 210,443 shares of our public shares upon consummation of our initial Business Combination, in which case we may issue additional securities or incur debt in connection with such Business Combination. In order to finance operating and/or transaction costs in connection with a Business Combination, our Sponsor, executive officers, directors, or their affiliates may, but are not obligated to, loan us funds. In the event that our initial Business Combination does not close, we may use a portion of the working capital held outside the Trust Account to repay such loaned amounts but no proceeds from our Trust Account would be used for such repayment. Up to $1,500,000 of such loans may be convertible into units of the post-Business Combination entitycommon stock at a price of ~~$10.00~~$15.80 per ~~unit at~~share.

On March 15, 2023, we entered into privately negotiated exchange agreements with certain holders pursuant to which the ~~option~~holders agreed to exchange $10.5 million in aggregate principal amount of the ~~lender. The units would be identical~~outstanding Convertible Notes for 937,500 shares of our common stock, par value $0.0001 per share, at a price of $11.20 per share.

We also had outstanding $3.0 million of principal indebtedness associated with our Facility, which matures on October 21, 2024. We are obligated to make quarterly interest payments of $0.1 million through maturity based on an annual interest rate of 15%. See Note 7 to the ~~Private Placement Units.~~

~~Following~~consolidated financial statements for additional information.

On May 16, 2023, we entered into a Pre-Paid Advance Agreement, or the PPA, with YA II PN, Ltd., a Cayman Islands exempt limited partnership, or Yorkville. In accordance with the terms of the PPA, we may request pre-paid advances of up to $2,000 from the Investor at a discount of 92% (or such greater amount that the parties may mutually agree), with an aggregate limit of $50,000, over an 18-month period. Interest will accrue on the outstanding balance of any Pre-Paid Advance at 0%, subject to an increase to 15% upon events of default described in the PPA. At any time while a Pre-Paid Advance is outstanding, Yorkville may, by providing written notice, require us to issue and sell shares of common stock. The aggregate purchase price of the shares of common stock will be based on a price per share equal to the lower of: (a) with respect to each advance, 100% of the volume weighted average price (the “VWAP”) of our ~~initial Business Combination, if cash~~common stock on ~~hand is insufficient,~~the trading day immediately preceding the closing of such advance (the “Fixed Price”) or (b) 92.0% of the average of the two lowest daily VWAPs during the seven trading days immediately prior to receipt of the notice (as applicable, the “Purchase

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Price”), however in no event will the Purchase price be less than $0.856 (the “Contractual Floor Price”). During the quarter ended June 30, 2023, we ~~may~~received $3,200 in advances under the PPA and issued 461,548 shares of common stock to Yorkville. Since June 30, 2023 and through the filing date, we issued 315,605 shares of common stock to Yorkville. We reserved 1,124,782 shares of our common stock for issuances to Yorkville. However, we will need to obtain ~~additional financing~~stockholder approval to issue more shares. We agreed with Yorkville that we will not utilize the ELOC while there are outstanding advances without Yorkville’s consent.

During the three and six months ended June 30, 2023, the Company received Pre-Paid Advances in ~~order~~the aggregate amount of $3.2 million and received proceeds in the amount of $2.9 million, net of issuance cost in the amount of $0.3 million. During the three and six months ended June 30, 2023, the Company converted $1.6 million with the issuance of 461,548 newly issued shares of common stock to ~~meet~~Yorkville. Since June 30, 2023 and through the filing date, the Company converted $1.1 million with the issuance of 315,605 shares of common stock to Yorkville. Interest expense related to the PPA was $0.5 million for the three and six months ended June 30, 2023 and zero for the three and six months ended June 30, 2022.

Leases

We have one material lease commitment, an operating lease covering our ~~obligations.~~

~~Off-Balance Sheet Arrangements~~

manufacturing center, distribution center and office space. We also have an operating lease for IT equipment and finance leases for manufacturing equipment. As of June 30, ~~2020, we~~2023, our total minimum lease commitments were $12.0 million, with $3.2 million due in the next twelve months. See Note 8 to the consolidated financial statements for additional information.

Cash Flows

The following table provides a summary of cash flow data (in thousands):


	Six Months Ended June 30,
	2023		2022
	(dollar amounts in thousands)
Net cash used in operating activities	$	(43,700)	$	(39,178)
Net cash used in investing activities	(2,539)		(3,930)
Net cash provided by (used in) financing activities	2,848		(20)
Net (decrease) increase in cash	$	(43,391)	$	(43,128)

Cash Flows Used In Operating Activities

Net cash used in operating activities for the six months ended June 30, 2023 and 2022 was $43.7 million and $39.2 million, respectively. Cash flows from operating activities are significantly affected by revenue levels, mix of products and services, and investments in the business in research and development and selling, general and administrative costs in order to develop products and services, improve manufacturing capacity and efficiency, and support revenue growth. With respect to the six months ended June 30, 2023, increases in net cash used in operating activities, in comparison to the corresponding prior period, were principally driven by increases in cost of revenues and selling, general and administrative expenses, as described in more detail above.

Cash Flows Used In Investing Activities

Net cash used in investing activities for the six months ended June 30, 2023 and 2022 was $2.5 million and $3.9 million, respectively. The decrease is primarily related to a decrease in capital expenditures.

Cash Flows From Financing Activities

Net cash provided in financing activities for the six months ended June 30, 2023 was $2.8 primarily from the Pre-Paid Advance Agreement offset by payments of finance lease obligations. Net cash used in financing activities for the six June 30, 2022 was de minimis.

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Off-Balance Sheet Arrangements

We have not ~~entered into~~engaged in any off-balance sheet ~~financing arrangements.~~ arrangements, as defined in the rules and regulations of the SEC.

Critical Accounting Policies and Estimates

We ~~do not participate in transactions~~believe that ~~create relationships with unconsolidated entities or financial partnerships, often referred to as variable interest entities, which would~~there have been ~~established~~no significant changes to our critical accounting policies and estimates during the six months ended June 30, 2023 as compared to those disclosed in our Annual Report on Form 10-K for the ~~purpose of facilitating off-balance sheet arrangements.~~ year ended December 31, 2022.

Emerging Growth Company Status

We ~~have not entered into any off-balance sheet financing arrangements, established any special purpose entities, guaranteed any debt~~are an emerging growth company, or ~~commitments of other entities, or purchased any non-financial assets.~~

~~Contractual Obligations~~

As of June 30, 2020, we do not have any long-term debt, capital lease obligations, operating lease obligations or long-term liabilities, other than an agreement to pay our Sponsor a monthly fee of $20,000 for office space, administrative services and secretarial support. We began incurring these fees on May 14, 2020 and will continue to incur these fees monthly until the earlierEGC, as defined in Section 2(a) of the ~~completion of the Business Combination or the liquidation of the Company.~~

~~Critical Accounting Policies~~

The preparation of financial statements and related disclosures in conformity with accounting principles generally accepted in the United States of America (“GAAP”) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the financial statements, and income and expenses during the periods reported. Actual results could materially differ from those estimates. We have identified the following critical accounting policies:

~~Emerging Growth Company~~

~~Section 102(b)(1) of~~Securities Act, as modified by the JOBS ~~Act exempts emerging growth companies from being required~~Act. As an EGC, we are permitted to take advantage of an extended transition period to comply with new or revised ~~financial~~accounting standards, delaying the adoption of these accounting standards until they would apply to private companies. We have elected to use this extended transition period to enable us to comply with new or revised accounting standards that have different effective dates for public and private companies ~~(that is, those~~until the earlier of the date we (i) are no longer an emerging growth company or (ii) affirmatively and irrevocably opt out of the extended transition period. As a result, our financial statements may not be comparable to companies that ~~have not had a Securities Act registration statement declared effective or do not have a class of securities registered under the Exchange Act) are required to~~ comply with the new or revised ~~financial~~ accounting ~~standards. The~~standards as of public company effective dates.

In addition, we intend to rely on the other exemptions and reduced reporting requirements provided by the JOBS Act. Subject to certain conditions set forth in the JOBS Act, ~~provides that a company can elect~~if, as an EGC, we intend to ~~opt out~~rely on such exemptions, we are not required to, among other things: (i) provide an auditor’s attestation report on our system of internal controls over financial reporting pursuant to Section 404(b) of the ~~extended transition period~~Sarbanes-Oxley Act; (ii) provide all of the compensation disclosure that may be required of non-emerging growth public companies under the Dodd-Frank Wall Street Reform and Consumer Protection Act; (iii) comply with ~~the requirements~~any requirement that apply to non-emerging growth companies but any such election to opt out is irrevocable. We have elected not to opt out of such extended transition period which means that when an accounting standard is issued or revised and it has different application dates for public or private companies, we, as an emerging growth company, will adopt the new or revised accounting standard at the time private companies adopt the new or revised standard.

~~Net Loss Per Common Share~~

~~Net loss per share of common stock is computed by dividing net loss~~may be adopted by the ~~weighted-average number of shares of common stock outstanding for~~Public Company Accounting Oversight Board regarding mandatory audit firm rotation or a supplement to the ~~period. We apply~~auditor’s report providing additional information about the ~~two-class method in calculating~~audit and the ~~net loss per common share. Shares of common stock subject to possible redemption~~financial statements (auditor discussion and analysis); and (iv) disclose certain executive compensation-related items such as ~~of June 30, 2020 have been excluded from~~ the ~~calculation~~correlation between executive compensation and performance and comparisons of the ~~basic net loss per share since such shares, if redeemed, only participate~~Chief Executive Officer’s compensation to median employee compensation.

We will remain an EGC under the JOBS Act until the earliest of (i) December 31, 2025, which is the last day of our first fiscal year following the fifth anniversary of our initial public offering, (ii) the last date of our fiscal year in ~~their pro rata share~~which we have total annual gross revenue of at least $1.24 billion, (iii) the date on which we are deemed to be a “large accelerated filer” under the rules of the ~~Trust Account earnings. When calculating~~SEC with at least $700.0 million of our ~~diluted net loss per share,~~common equity held by non-affiliates, or (iv) the date on which we have ~~not considered the effect of (i) the incremental number of shares of common stock to settle warrants sold~~issued more than $1.0 billion in the Offering and Private Placement, as calculated using the treasury stock method; (ii) the shares issued to the Insiders representing 15,000 shares of common stock underlying restricted stock awards for the periods they were outstanding; and (iii) the 750,000 shares of common stock issued to the Founder that were forfeited due to the over-allotment option not being exercised by the Underwriters. Since we were in net loss positionnon-convertible debt securities during the period after deducting net income attributable to common stock subject to redemption, diluted net loss per common share is the same as basic net loss per common share for the periods presented as the inclusion of all potential common shares outstanding would have been anti-dilutive.

In accordance with the two-class method, our net loss is adjusted for net income that is attributable to common stock subject to redemption, as these shares only participate in the income of the Trust Account and not our losses. Accordingly, net loss per common share, basic and diluted, is calculated as follows:

previous three-year period.

For the Three
Months Ended
June 30, 2020

Period from
February 3, 2020
(Inception)
through
June 30, 2020

Net loss

$
(131,608
)

$
(157,396
)
Less: net income attributable to common stock subject to redemption

(10,752
)

(10,752
)
Net loss attributable to common stockholders

$
(142,360
)

$
(168,148
)
Weighted-average common shares outstanding, basic and diluted

5,941,006

5,267,762

Net loss per share common share, basic and diluted

$
(0.02
)

$
(0.03
)

~~Common Stock subject to possible redemption~~

Common stock subject to mandatory redemption (if any) is classified as a liability instrument and is measured at fair value. Conditionally redeemable common stock (including common stock that features redemption rights that are either within the control of the holder or subject to redemption upon the occurrence of uncertain events not solely within our control) is classified as temporary equity. At all other times, common stock is classified as stockholders’ equity. Our common stock features certain redemption rights that are considered to be outside of our control and subject to occurrence of uncertain future events. Accordingly, as of June 30, 2020, common stock subject to possible redemption is presented as temporary equity, outside of the stockholders’ equity section of our condensed balance sheet.

~~Recent Accounting Pronouncements~~

~~We do not believe that any recently issued, but not yet effective, accounting pronouncements, if currently adopted, would have a material effect on our condensed financial statements.~~

Item 3. Quantitative and Qualitative Disclosures About Market ~~Risk.~~

Risk

As a small reporting company defined by Rule 12b-2 of ~~June 30, 2020, we were not subject to any market or interest rate risk. The funds held in~~ the Trust Account are only to be invested in United States government treasury bills, bonds or notes having a maturity of 185 days or less, or in money market funds meeting the applicable conditions under Rule 2a-7 promulgated under the Investment CompanyExchange Act and ~~that invest solely~~ in ~~U.S. treasuries. Due~~Item 10(f)(1) of regulation S-K, we are not required to provide the ~~short-term nature of these investments, we believe there will be no associated material exposure to interest rate risk.~~

information requested by this item.

Item 4. Controls and ~~Procedures.~~

Procedures

Disclosure Controls and Procedures

The Company maintains disclosure controls and procedures ~~are controls and other procedures that are~~ designed to ~~ensure~~provide reasonable assurance that information required to be disclosed by the Company in ~~our~~ reports ~~filed~~that it files or ~~submitted~~submits under the Exchange Act is recorded, processed, summarized, and reported within the time periods specified in ~~the SEC’s~~SEC rules and forms. ~~Disclosure~~Any controls and procedures, ~~include, without limitation, controls~~no matter how well designed and ~~procedures designed to ensure that information required to be disclosed in our reports filed or submitted under~~operated, can provide only reasonable, not absolute, assurance of achieving the ~~Exchange Act is accumulated and communicated to our~~desired control objectives. The Company’s management, ~~including~~with participation from our Chief Executive Officer and Chief Financial Officer, ~~to allow timely decisions regarding required disclosure.~~

~~Evaluation of Disclosure Controls and Procedures~~

~~As required by Rules 13a-15 and 15d-15 under the Exchange Act, our Chief Executive Officer and Chief Financial Officer carried out an evaluation of~~has evaluated the effectiveness of ~~the~~our design and operation of ~~our~~the Company’s disclosure controls and procedures as of June 30, ~~2020.~~2023. Based upon ~~their~~that evaluation, ~~our~~the Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures ~~(as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act)~~ were ~~effective.~~

effective as of June 30, 2023.

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Changes in Internal Control over Financial Reporting

During ~~our most recently completed fiscal quarter,~~the three months ended June 30, 2023, there has been no change in our internal control over financial reporting that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

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PART ~~II—~~II — OTHER INFORMATION

Item 1. Legal ~~Proceedings.~~

~~None.~~

Proceedings

The information with respect to this Part II, Item 1 can be found in Note 13 to the consolidated financial Statements included in this quarterly report on Form 10-Q, and is incorporated herein by reference.

Item 1A. Risk ~~Factors.~~

~~As of the date of this Quarterly Report on Form 10-Q,~~Factors

Except as set forth below, there have been no material changes tofrom the risk factors ~~disclosed~~previously discussed in Part 1, Item 1A Risk Factors in our ~~final prospectus~~annual report on Form 10-K for ~~our Offering which was filed with~~ the ~~SEC on May 15, 2020. Any of~~year ended December 31, 2022. However, these ~~factors could result in a significant or material adverse effect on our results of operations or financial condition. Additional risk factors~~risks are not ~~presently~~the only risks facing us. There may be additional risks and uncertainties that are not currently known to us or that we currently ~~deem immaterial may also impair~~consider to be insignificant that could materially and adversely affect our business, financial condition, or operating results in the future.

We have a history of losses, and we expect to incur significant expenses and continuing losses for the foreseeable future and there is substantial doubt regarding our ability to continue as a going concern.

As indicated in our annual report on Form 10-K for the year ended December 31, 2022, we have a history of losses, and expect to incur losses and significant expenses for the foreseeable future, which casts substantial doubt regarding our ability to continue as a going concern.

Doubts about our ability to continue as a going concern have and could continue to negatively impact our relationships with our suppliers, vendors, and other third parties and our ability to obtain, maintain or renew agreements with them, or negatively impact our negotiating leverage with such parties, which could have a material adverse effect on our business, financial condition and results of operations. Furthermore, any loss of key personnel, employee attrition or material erosion of employee morale arising out of doubts about our ability to operate as a going concern could have a material adverse effect on our ability to effectively conduct our business, and could impair our ability to execute our business plan, thereby having a material adverse effect on our business, financial condition and results of operations.

We ~~may disclose changes~~need significant additional funding to ~~such risk factors~~execute our business plan and to continue operations. We continue to seek and evaluate opportunities to raise additional funds through the issuance of our securities, asset sales, and through arrangements with strategic partners. We have engaged a financial advisor to assist us in identifying strategic partners and financing to fund operations and to take actions to maximize our liquidity. If capital is not available to us when, and in the amounts needed, we could be required to liquidate our inventory, cease or ~~disclose additional risk factors from time~~curtail operations, or seek protection under applicable bankruptcy laws or similar state proceedings. There can be no assurance that we will be able to ~~time in~~raise the capital we need to continue our ~~future filings with the SEC.~~

operations.

Item 2. Unregistered Sales of Equity Securities and Use of ~~Proceeds.~~

~~Founder Shares~~

Proceeds

During the ~~period from February 3, 2020 (date of inception) to February 14, 2020, the Sponsor purchased~~ ~~5,735,000 shares of the Company’s Common Stock (the “Founder Shares”), including up to 750,000 shares subject to forfeiture if the Underwriters~~three months ended June 30, 2023, we did not ~~exercise the over-allotment option, for an aggregate purchase price of $25~~,~~000, or $0~~.0044 per share. The Company also issued 5,000 shares of Common Stock, solely in consideration of future services, to each of the Insiders pursuant to Insider Shares Grant Agreements dated May 13, 2020 between the Company and each of the Insiders, for an aggregate issuance of 15,000 shares of Common Stock (the “Insider Shares”). On June 27, 2020, the 45-day over-allotment option expired, and the Underwriters did not exercise the option as described in the Company’s Form 8-K filed with the SEC on June 30, 2020. Therefore, the Sponsor forfeited 750,000 Founder Shares, which were subsequently cancelled. ~~As a result, there were 5,000,000 Founder Shares and Insider Shares outstanding as of June 30, 2020.~~

The Founder Shares were issued pursuant to the exemption from registration contained in Section 4(a)(2) of the Securities Act of 1933, as amended (the “Securities Act”). The holder of the Founder Shares is an “accredited investor” as such term is defined in Rule 501(a) of Regulation D under the Securities Act.

~~Private Placement~~

On May 18, 2020 the Founder and the Underwriters purchased from the Company an aggregate of 650,000 and 243,479 Private Placement Units at a price of $10.00 per unit in a private placement that occurred simultaneously with the completion of the closing of the Offering. Each Private Placement Unit consists of one share of the Company’s common stock, $0.0001 par value and three-fourths (3/4) of one warrant (a “Private Placement Warrant”). Each whole Private Placement Warrant will be exercisable for $11.50 per share, and the exercise price of the Private Placement Warrants may be adjusted in certain circumstances as described in Note 6. Unlike the warrants included in the Units sold in the Offering, if held by the original holder or its permitted transferees, the warrants included in the Private Placement Units are not redeemable by the Company and subject to certain limited exceptions, will be subject to transfer restrictions until one year following the consummation of the Business Combination. If the warrants included in the Private Placement Units are held by holders other than the initial holders or their permitted transferees, the warrants included in the Private Placement Units will be redeemable by the Company and exercisable by holders on the same basis as the warrants included in the Offering.

The Private Placement Units were issued pursuant to the exemption from registration contained in Section 4(a)(2) of the Securities Act of 1933, as amended (the “Securities Act”). The Founder and Underwriters are each an “accredited investor” as such term is defined in Rule 501(a) of Regulation D under the Securities Act.

~~Insider Shares~~

Simultaneously with the completion of the initial closing of the Offering, we issued 5,000 insider shares, in consideration of future services, to each of Messrs. Weightman, Wang and Betti-Berutto (“Insiders”), for an aggregate issuance of 15,000 shares of common stock. The insider shares were issued pursuant to the exemption from registration contained in Section 4(a)(2) of the Securities Act. Each of the Insiders is an “accredited investor” as such term is defined in Rule 501(a) of Regulation D under the Securities Act.

issue unregistered shares.

~~Use of Proceeds~~

On May 18, 2020, the Company completed the closing of the Offering whereby the Company sold 20,000,000 Units. Each Unit consists of one share of the Company’s common stock and three-fourths (3/4) of one warrant to purchase the Company’s common stock. No fractional shares will be issued upon exercise of the warrants. The Units in the Offering were sold at an offering price of $10.00 per unit, generating total gross proceeds from the Offering in the aggregate amount of $200,000,000. The Units sold in the Offering were registered under the Securities Act on registration statements on Form S-1 (No. 333-236626), which were declared effective by the SEC on May 13, 2020. The Underwriters for the Offering were Nomura Securities International, Inc., Oppenheimer & Co. Inc., and Odeon Capital Group LLC.

The Company incurred $12,747,907 in transaction costs, consisting of $4,000,000 of underwriting fees, $8,000,000 of deferred underwriting fees, and $747,907 of offering costs. After deducting the underwriting discounts and commissions and offering expenses paid, the total net proceeds from the Offering and Private Placement was $204,286,883, of which $202,000,000 were placed in Trust Account at Oppenheimer & Co., Inc. in New York, New York with Continental Stock Transfer & Trust Company acting as trustee. Using a portion of the net proceeds of the Offering that was not placed in the Trust Account, we repaid a promissory note issued to our Sponsor, which bore the outstanding principal amount of $100,000, when we repaid it upon the closing of the Offering. The proceeds held in the Trust Account may be invested by the trustee only in U.S. government treasury bills with a maturity of one hundred and eighty-five (185) days or less or in money market funds meeting certain conditions under Rule 2a-7 under the Investment Company Act of 1940 which invest only in direct U.S. government obligations.

~~As of June 30, 2020, we had cash of $1,957,071 held outside the Trust Account for working capital purposes.~~

Item 3. Defaults Upon Senior ~~Securities.~~

~~Not Applicable.~~

Securities

None.

Item 4. Mine Safety ~~Disclosures.~~

Disclosures

Not ~~Applicable.~~

applicable.

Item 5. Other ~~Information.~~

~~None.~~

Information

Amendment to Security Agreement

On August 10, 2023, we entered into Amendment No. 2 (the “Amendment”) to the Loan and Security Agreement dated October 10, 2019, as amended (the “Loan and Security Agreement”)with Cupola Infrastructure Income Fund, L.L.L.P.. The Amendment modifies certain terms of the Loan and Security Agreement: (i) the Amendment modifies our Facility’s financial covenant requiring that total equity plus expected EBITDA at the end of the next quarter and the following quarter be greater than $0, by establishing that the covenant is to now be evaluated beginning with the quarter ending September 30, 2023; and (ii) the Amendment also provides for a 3% increase, from 15% to 18%, on the fixed annual

46

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interest rate under our Facility for any principal amount outstanding on any working capital loans. The description of the Amendment is qualified in its entirety by reference to the text of the Amendment, which is filed as Exhibit 10.9 to this report and is incorporated herein by reference.

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Item 6. E~~xhibits.~~

Exhibits

EXHIBIT INDEX

~~Exhibit~~ ~~Number~~	~~Description~~
Exhibit No.		Description
31.1*
2.1*		Business Combination Agreement, dated as of December 10, 2020, by and among GigCapital3, Inc., Project Power Merger Sub, Inc. and Lightning Systems, Inc. (included as Annex A to the Final Proxy Statement/Prospectus filed under Rule 424(b)(3) on March 26, 2021).

3.1		Second Amended and Restated Certificate of Incorporation of Lightning eMotors, Inc. (incorporated by reference to Exhibit 3.1 filed on the Company’s Current Report on Form 8-K, filed by the Company on May 12, 2021)

3.2		Certificate of Amendment to the Second Amended and Restated Certificate of Incorporation of the Company, effective April 27, 2023 (incorporated by reference to Exhibit 3.1 filed on the Company’s Current Report on Form 8-K, filed by the Company of April 24, 2023)

3.3		Amended and Restated Bylaws of Lightning eMotors, Inc. (incorporated by reference to Exhibit 3.2 filed on the Company’s Current Report on Form 8-K, filed by the Company on May 12, 2021)

4.1		Specimen Common Stock Certificate (incorporated by reference to Exhibit 4.1 filed on the Company’s Form S-1 (File No. 333-257237), filed by the Company on June 21, 2021)

4.2		Specimen Warrant Certificate (incorporated by reference to Exhibit A in Exhibit 10.4 filed on the Company’s Current Report on Form 8-K, filed by the Company on May 12, 2021)

4.3		Description of the Company’s Securities (incorporated by reference to Exhibit 4.3 filed on the Company’s Annual Report on Form 10-K for the year ended December 31, 2021, filed by the Company on March 30, 2022)

10.1		Lightning Systems, Inc. 2019 Equity Incentive Plan (incorporated by reference to Exhibit 10.16 filed on the Company’s Current Report on Form 8-K/A, filed by the Company on May 17, 2021)

10.2		2021 Equity Incentive Plan (incorporated by reference to Exhibit 10.7 filed on the Company’s Current Report on Form 8-K, filed by the Company on May 12, 2021)

10.3		Indenture dated May 6, 2021, by and between the Company and Wilmington Trust, National Association, in its capacity as trustee thereunder (incorporated by reference to Exhibit 10.3 filed on the Company’s Current Report on Form 8-K, filed by the Company on May 12, 2021)

10.4		Amended and Restated Warrant Agreement, dated May 6, 2021, by and between the Company and Continental Stock Transfer & Trust Company, as warrant agent (incorporated by reference to Exhibit 10.4 filed on the Company’s Current Report on Form 8-K, filed by the Company on May 12, 2021)

10.5		Purchase Agreement, dated August 30, 2022, between the Company and Lincoln Park Capital Fund, LLC (incorporated by reference to Exhibit 10.1 filed on the Company’s Current Report on Form 8-K, filed by the Company on August 30, 2022)

10.6†		Settlement Agreement and Mutual Release, dated July 24, 2023, in the matter of eMatrix Energy Systems, Inc. v. Lightning eMotors, Inc. v. eMatrix Energy Systems, Inc. and Linamar Corporation

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10.7†		Loan and Security Agreement, dated October 10, 2019, between the Company and Cupola Infrastructure Income Fund L.L.L.P.

10.8†		First Amendment to the Loan and Security Agreement, dated November 15, 2021, between the Company and Cupola Infrastructure Income Fund L.L.L.P.

10.9†		Second Amendment to the Loan and Security Agreement, dated August 10, 2023, between the Company and Cupola Infrastructure Income Fund L.L.L.P.

31.1†		Certification of ~~Principal~~Chief Executive Officer ~~Pursuant to Rules 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934, as Adopted~~ Pursuant to Section 302 of the Sarbanes-Oxley Act of ~~2002.~~2002

31.2* 31.2†		Certification of ~~Principal~~Chief Financial Officer ~~Pursuant to Rules 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934, as Adopted~~ Pursuant to Section 302 of the Sarbanes-Oxley Act of ~~2002.~~2002

32.1* *		Certification of ~~Principal~~Chief Executive Officer (Principal Executive Officer) and Chief Financial Officer (Principal Financial Officer) Pursuant to 18 U.S.C. Section 1350, as ~~Adopted Pursuant~~adopted pursuant to Section 906 of the Sarbanes-Oxley Act of ~~2002.~~2002

32.2* 101.INS		~~Certification of Principal Financial Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.~~

~~101.INS~~	Inline XBRL Instance Document

101.SCH		Inline XBRL Taxonomy Extension Schema Document

101.CAL		Inline XBRL Taxonomy ~~Extension~~ Calculation Linkbase Document

101.DEF		Inline XBRL Taxonomy ~~Extension~~ Definition Linkbase Document

101.LAB		Inline XBRL Taxonomy Extension Label Linkbase Document

101.PRE		Inline XBRL Taxonomy Extension Presentation Linkbase Document

104†		Cover Page Interactive Data File (formatted in iXBRL and contained in Exhibit 101)

*	~~Filed herewith.~~

*Schedules and similar attachments to this exhibit have been omitted pursuant to Item 601(a)(5) of Regulation S-K and the Company agrees to furnish a copy of such omitted materials to the SEC upon request.

†Filed herewith.

# Indicates a management contract or compensatory plan, contract or arrangement.

**Furnished herewith.

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

Date: August 14, 2023

	~~Company Name~~
					LIGHTNING EMOTORS, INC.
~~Date: August 14, 2020~~			~~By:~~	~~/s/ Dr. Avi S. Katz~~
		By:		/s/ Timothy Reeser
		Name:	Timothy Reeser
		Title:	Chief Executive Officer ~~President~~ and ~~Executive Chairman~~ President
			(Principal Executive Officer)

~~Date: August 14, 2020~~		By:	~~By:~~	/s/ ~~Brad Weightman~~ David Agatston
		Name:		~~Brad Weightman~~ David Agatston
		Title:		~~Vice President and~~ Chief Financial Officer
			(Principal Financial ~~and Accounting~~ Officer)

22

50

~~Delaware~~	~~84-4605714~~
Delaware		84-4605714
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification ~~No.)~~ Number)
~~1731 Embarcadero Rd., Suite 200~~ ~~Palo Alto, CA~~		~~94303~~
815 14th Street SW Suite A100 Loveland, Colorado		80537
(Address of ~~principal executive offices)~~ Principal Executive Offices)		(Zip Code)

	~~Page~~
~~PART I.~~		~~FINANCIAL INFORMATION~~	Page
~~Item 1.~~		~~Condensed Financial Statements (Unaudited)~~	1
Part I		~~Condensed Balance Sheet~~Financial Information	1

~~Condensed~~Item 1.		Financial Statements	3

		Consolidated Balance Sheets as of June 30 , 2023 (Unaudited) and December 31, 2022	3

		Consolidated Statements of Operations for the three and ~~Comprehensive Loss~~si x months ended June 30 , 2023 and 2022 (Unaudited)	2 4

		~~Condensed~~Consolidated Statements of Stockholders’ Equity ~~(Deficit)~~for the three and six months ended June 30 , 2023 and 2022 (Unaudited)	3 5

		~~Condensed Statement~~Consolidated Statements of Cash Flows for the six months ended June 30 , 2023 and 2022 (Unaudited)	4 6

		Notes to ~~Unaudited Condensed~~Consolidated Financial Statements (Unaudited)	5 8

Item 2.		Management’s Discussion and Analysis of Financial Condition and Results of Operations	14 33

Item 3.		Quantitative and Qualitative Disclosures ~~About~~about Market Risk	18 44

Item 4.		Controls and Procedures	18 44
~~PART II.~~		~~OTHER INFORMATION~~
Part II		Other Information

Item 1.		Legal Proceedings	19 46

Item 1A.		Risk Factors	19 46

Item 2.		Unregistered Sales of Equity Securities and Use of Proceeds	19 46

Item 3.		Defaults Upon Senior Securities	20 46

Item 4.		Mine Safety Disclosures	20 46

Item 5.		Other Information	20 46
~~Item 6.~~		~~Exhibits~~	21
Item 6.		Exhibits	48

Exhibit Index			48

Signatures			22 50

	June 30, 2020
ASSETS
Current Assets
Cash	$	1,957,071
Prepaid expenses and other current assets		136,648
Total current assets		2,093,719
Cash and marketable securities held in Trust Account		202,007,715
Interest receivable on cash and marketable securities held in the Trust Account		13,262
Other non-current assets		101,834
TOTAL ASSETS	$	204,216,530
LIABILITIES, REDEEMABLE COMMON STOCK AND STOCKHOLDERS’ EQUITY
Current liabilities
Accounts payable	$	6,918
Payable to related parties		5,343
Accrued liabilities		143,523
Other current liabilities		6,259
Total current liabilities		162,043
Deferred underwriting fee payable		8,000,000
Total liabilities		8,162,043
Commitments and contingencies (Note 5)
Common stock subject to possible redemption, 18,916,285 shares, at a redemption value of $10.10 per share		191,054,479
Stockholders’ equity
Preferred stock, par value of $0.0001 per share; 1,000,000 shares authorized; none issued or outstanding		—
Common stock, par value of $0.0001 per share; 100,000,000 shares authorized; 6,977,194 shares issued and outstanding (excluding 18,916,285 shares subject to possible redemption) (1)		698
Additional paid-in capital		5,156,706
Accumulated deficit		(157,396	)
Total stockholders’ equity		5,000,008
TOTAL LIABILITIES, REDEEMABLE COMMON STOCK AND STOCKHOLDERS’ EQUITY	$	204,216,530


	June 30, 2023		December 31, 2022
	(Unaudited)
Assets
Current assets
Cash and cash equivalents	$	12,620	$	56,011
Accounts receivable, net of allowance of $2,041 and $2,028 as of June 30, 2023 and December 31, 2022, respectively	8,660		9,899
Inventories	57,147		47,066
Prepaid expenses and other current assets	6,679		9,401
Total current assets	85,106		122,377
Property and equipment, net	12,971		11,519
Operating lease right-of-use asset, net	7,072		7,735
Other assets	2,010		1,928
Total assets	$	107,159	$	143,559
Liabilities and stockholders’ equity
Current liabilities
Accounts payable	$	10,255	$	7,961
Accrued expenses and other current liabilities	7,853		6,270
Warrant liability	10		60
Current portion of operating lease obligation	1,822		1,649
Current debt, net of debt discount	53,290		—
Total current liabilities	73,230		15,940
Long-term debt, net of debt discount	2,982		62,103
Operating lease obligation, net of current portion	6,772		7,735
Derivative liability	2		78
Earnout liability	446		2,265
Other long-term liabilities	794		880
Total liabilities	84,226		89,001
Commitments and contingencies (Note 13)
Stockholders’ equity
Preferred stock, par value $0.0001, 1,000,000 shares authorized and no shares issued and outstanding as of June 30, 2023 and December 31, 2022	—		—
Common stock, par value $0.0001, 250,000,000 shares authorized as of June 30, 2023 and December 31, 2022; 6,144,553 and 4,492,157 shares issued and outstanding as of June 30, 2023 and December 31, 2022, respectively	1		1
Additional paid-in capital	234,209		220,951
Accumulated deficit	(211,277)		(166,394)

Total stockholders’ equity	22,933		54,558
Total liabilities and stockholders’ equity	$	107,159	$	143,559

	Period from February 3, 2020 (Inception) through June 30, 2020
OPERATING ACTIVITIES
Net loss	$	(157,396	)
Adjustments to reconcile net loss to net cash and cash equivalents used in operating activities:
Interest earned on cash and marketable securities held in Trust Account		(7,715	)
Interest receivable on cash and marketable securities held in Trust Account		(13,262	)
Change in operating assets and liabilities:
Prepaid expenses		(136,648	)
Other non-current assets		(101,834	)
Accounts payable		6,918
Payable to related parties		5,343
Accrued liabilities		43,523
Other current liabilities		6,259
Net cash and cash equivalents used in operating activities		(354,812	)
INVESTING ACTIVITIES
Investment of cash in Trust Account		(202,000,000	)
Net cash and cash equivalents used in investing activities		(202,000,000	)
FINANCING ACTIVITIES
Proceeds from sale of common stock to Founder		25,000
Proceeds from sale of common stock in initial public offering, net of underwriting discounts paid		196,000,000
Proceeds from sale of common stock to Founder in private placement		6,500,000
Proceeds from sale of common stock to Underwriters in private placement		2,434,790
Borrowing from a related party		100,000
Repayment of borrowing from a related party		(100,000	)
Payment of deferred offering costs		(647,907	)
Net cash and cash equivalents provided by financing activities		204,311,883
Net change in cash and cash equivalents during period		1,957,071
Cash and cash equivalents, beginning of period		—
Cash and cash equivalents, end of period	$	1,957,071
SUPPLEMENTAL DISCLOSURE OF NON-CASH FINANCING ACTIVITIES
Offering costs included in accrued liabilities	$	100,000
Change in value of common stock subject to possible redemption	$	3,802,386

☒
(Mark One)
x			QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

☐
o			TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

	For the Three Months Ended June 30, 2020			Period from February 3, 2020 (Inception) through June 30, 2020
Revenues	$	—		$	—
General and administrative expenses		146,326			172,114
Loss from operations		(146,326	)		(172,114	)
Other income
Interest income on cash and marketable securities held in Trust Account		20,977			20,977
Loss before provision for income taxes		(125,349	)		(151,137	)
Provision for income taxes		6,259			6,259
Net loss and comprehensive loss	$	(131,608	)	$	(157,396	)
Net loss attributable to common stockholders	$	(142,360	)	$	(168,148	)
Weighted-average common shares outstanding, basic and diluted (1)		5,941,006			5,267,762
Net loss per share common share, basic and diluted	$	(0.02	)	$	(0.03	)

	Common Stock						Additional
Three Months Ended June 30, 2020	Shares			Amount			Paid-In Capital			Accumulated Deficit			Stockholders’ Equity (Deficit)
Balance as of March 31, 2020		5,735,000		$	574		$	24,426		$	(25,788	)	$	(788	)
Sale of common stock to Founder in private placement at $10 per share		650,000			65		$	6,499,935			—			6,500,000
Sale of common stock to Underwriters in private placement at $10 per share		243,479			24		$	2,434,766			—			2,434,790
Issuance of common stock to Insiders for no consideration		15,000			2			(2	)		—			—
Sale of common stock in initial public offering, net of offering costs		20,000,000			2,000			187,250,093			—			187,252,093
Forfeiture of common stock sold to Founder due to over-allotment not being exercised (1)		(750,000	)		(75	)		75			—			—
Shares subject to redemption		(18,916,285	)		(1,892	)		(191,052,587	)		—			(191,054,479	)
Net loss		—			—			—			(131,608	)		(131,608	)
Balance as of June 30, 2020		6,977,194		$	698		$	5,156,706		$	(157,396	)	$	5,000,008

	Common Stock						Additional
Period from February 3, 2020 (Inception) through June 30, 2020	Shares			Amount			Paid-In Capital			Accumulated Deficit			Stockholders’ Equity
Balance as of February 3, 2020 (Inception)		—		$	—		$	—		$	—		$	—
Sale of common stock to Founder at $0.0044 per share		5,735,000			574			24,426			—			25,000
Sale of common stock to Founder in private placement at $10 per share		650,000			65			6,499,935			—			6,500,000
Sale of common stock to Underwriters in private placement at $10 per share		243,479			24			2,434,766			—			2,434,790
Issuance of common stock to Insiders for no consideration		15,000			2			(2	)		—			—
Sale of common stock in initial public offering, net of offering costs		20,000,000			2,000			187,250,093			—			187,252,093
Forfeiture of common stock sold to Founder due to over-allotment not being exercised (1)		(750,000	)		(75	)		75			—			—
Shares subject to redemption		(18,916,285	)		(1,892	)		(191,052,587	)		—			(191,054,479	)
Net loss		—			—			—			(157,396	)		(157,396	)
Balance as of June 30, 2020		6,977,194		$	698		$	5,156,706		$	(157,396	)	$	5,000,008


	Common Stock			Additional Paid-in Capital		Stockholders’ Accumulated Deficit		Total Stockholders’ Equity (Deficit)
	Shares	Par Value
Balance as of March 31, 2023	5,652,448	$	1	$	230,965	$	(189,829)	$	41,137
Exercise of stock options	2,758	—		3		—		3
Vesting of restricted stock units, net of taxes	29,756	—		(12)		—		(12)
Common stock issued for conversion of debt	461,548	—		1,894		—		1,894
Canceled due to reverse split	(1,957)	—		—		—		—
Stock-based compensation expense	—	—		1,359		—		1,359


Net loss	—	—		—		(21,448)		(21,448)
Balance as of June 30, 2023	6,144,553	$	1	$	234,209	$	(211,277)	$	22,933

Balance as of December 31, 2022	4,492,157	$	1	$	220,951	$	(166,394)	$	54,558
Exercise of stock options	9,502	—		10		—		10
Vesting of restricted stock units, net of taxes	35,360	—		(14)		—		(14)
Common stock issued for conversion of debt	461,548	—		1,894		—		1,894
Canceled due to reverse split	(1,957)	—		—		—		—
Stock-based compensation expense	—	—		2,801		—		2,801
Conversion of convertible notes payable	1,147,943	—		8,567		—		8,567
Net loss	—	—		—		(44,883)		(44,883)
Balance as of June 30, 2023	6,144,553	$	1	$	234,209	$	(211,277)	$	22,933

Balance as of March 31, 2022	3,757,675	$	—	$	207,754	$	(192,320)	$	15,434
Exercise of stock options	14,028	—		117		—		117
Vesting of restricted stock units, net of taxes	8,802	—		(108)		—		(108)
Stock-based compensation expense	—	—		1,436		—		1,436

Net income	—	—		—		35,738		35,738
Balance as of June 30, 2022	3,780,505	$	—	$	209,199	$	(156,582)	$	52,617

Balance as of December 31, 2021	3,753,132	$	—	$	206,776	$	(181,564)	$	25,212
Exercise of stock options	15,250	—		123		—		123
Vesting of restricted stock units, net of taxes	12,123	—		(108)		—		(108)
Stock-based compensation expense	—	—		2,408		—		2,408

Net income	—	—		—		24,982		24,982
Balance as of June 30, 2022	3,780,505	$	—	$	209,199	$	(156,582)	$	52,617

	For the Three Months Ended June 30, 2020			Period from February 3, 2020 (Inception) through June 30, 2020
Net loss	$	(131,608	)	$	(157,396	)
Less: net income attributable to common stock subject to redemption		(10,752	)		(10,752	)
Net loss attributable to common stockholders	$	(142,360	)	$	(168,148	)
Weighted-average common shares outstanding, basic and diluted		5,941,006			5,267,762
Net loss per share common share, basic and diluted	$	(0.02	)	$	(0.03	)


Major Class of Property and Equipment						Estimated Useful Lives
Machinery and equipment						7 years
Vehicles						5 years
Leasehold improvements						5 years
Computer equipment						3 years
Software						3 years
Furniture and fixtures						7 years


Balance as of December 31, 2022	$	794
Revenues recognized	(1,653)
Increase due to billings	1,980
Balance as of June 30, 2023	$	1,121


	June 30, 2023		December 31, 2022		January 1, 2022
Accounts receivable, net of allowance of $2,041, $2,028 and $3,349 as of June 30, 2023, December 31, 2022 and January 1, 2022, respectively	$	8,660	$	9,899	$	9,172
Contract Assets	321		—		—
Contract Liabilities - Current	1,121		794		147


	Level 1		Level 2		Level 3
As of June 30, 2023
Financial assets
Cash equivalents	$	6,987	$	—	$	—
Financial Liabilities
Warrant liability	$	—	$	—	$	10
Derivative liability	—		—		2
Earnout liability	—		—		446
As of December 31, 2022
Financial assets
Cash equivalents	$	51,351	$	—	$	—
Financial Liabilities
Warrant liability	$	—	$	—	$	60
Derivative liability	—		—		78
Earnout liability	—		—		2,265


	June 30, 2023

Balance at beginning of period	$	2,265
(Gain) loss	(1,819)
Balance at end of period	$	446


	June 30, 2023		December 31, 2022
Raw materials	$	36,609	$	30,763
Work in progress	3,404		3,357
Finished goods	17,134		12,946
Total inventories	$	57,147	$	47,066


	June 30, 2023		December 31, 2022
Vendor deposits	$	2,813	$	4,447
Prepaid insurance	1,564		2,367
Other prepaid expenses	2,281		2,559
Other current assets	21		28
Total prepaid expenses and other current assets	$	6,679	$	9,401


	June 30, 2023		December 31, 2022
Accrued professional services	$	666	$	597
Accrued interest	561		806
Accrued payroll and benefits	2,124		1,451
Other accrued expense	441		1,436
Warranty liability	1,599		1,268
Refund liability	1,285		—
Customer deposits	875		427
Deferred revenue	92		106
Current portion of finance lease obligation	210		179
Total accrued expenses and other current liabilities	$	7,853	$	6,270


	June 30, 2023		December 31, 2022
Convertible Note	$	59,863	$	73,863
Facillity	3,000		3,000
Prepaid Advance Agreement	1,650		—
Total debt principal	64,513		76,863
Unamortized debt discount - Convertible Note	(8,092)		(14,735)
Unamortized debt discount - Facility	(18)		(25)
Unamortized debt discount - Prepaid Advance Agreement	(131)		—
Total debt less unamortized debt discount	$	56,272	$	62,103
Less current portion - Convertible Note	$	(51,771)	$	—
Less current portion - Prepaid Advance Agreement	$	(1,519)	$	—
Total long-term debt	$	2,982	$	62,103


Period Ending December 31,	Amount
2023 (remainder of the year)	$	—
2024	64,513
2025	—
Thereafter	—
Total	$	64,513


	June 30, 2023				December 31, 2022
	Operating		Finance		Operating		Finance
Assets
Right-of-use assets, net (1)	$	7,072	$	973	$	7,735	$	893
Liabilities
Lease obligation - current portion (2)	$	1,822	$	210	$	1,649	$	179
Lease obligation - long-term portion (3)	6,772		640		7,735		619
Total lease obligations	$	8,594	$	850	$	9,384	$	798

Weighted average remaining lease terms (in years)	3.7		4.4		4.2		4.8
Weighted average discount rate	15%		4%		15%		4%


	Number of Warrants(1)	Warrant Fair Value		Weighted Average Exercise Price		Weighted Average Remaining Life
Private warrants assumed through Business Combination
Outstanding at December 31, 2021	670,108	$	2,185	$	230.00	4.3
Change in fair value	—	(2,125)		—		—
Outstanding — December 31, 2022	670,108	60		230.00		3.4
Change in fair value	—	(50)		—		—
Outstanding — June 30, 2023	670,108	10		230.00		2.8


Stock options unrecognized expense	$	2,717
Stock options weighted-average remaining requisite service period (in years)	1.7
Restricted stock units unrecognized expense	$	8,458
Restricted stock units weighted-average remaining requisite service period (in years)	1.5


	Number of Options	Weighted Average Exercise Price per Share		Aggregate Intrinsic Value (in thousands)		Weighted Average Remaining Life (in years)
Outstanding at January 1, 2023	138,091	$	45.60
Granted	—	$	—
Exercised	(9,502)	$	1.08
Forfeited	(4,100)	$	12.96
Expired	(1,093)	$	—
Outstanding at June 30, 2023	123,396	$	50.32	$	96	7.5
Vested and exercisable at June 30, 2023	70,636	$	39.56	$	64	7.2


	Non-vested Shares Under Option	Weighted Average Grant Date Fair Value per Share
Non-vested at January 1, 2023	73,939	$	35.00
Granted	—	$	—
Vested	(17,079)	$	87.65
Forfeited	(4,100)	$	12.96
Non-vested at June 30, 2023	52,760	$	64.73


	Number of RSUs	Weighted Average Grant Date Fair Value per Share
Outstanding at January 1, 2023	188,223	$	71.40
Granted	239,189	$	5.45
Vested	(39,069)	$	89.26
Forfeited	(31,949)	$	57.07
Outstanding at June 30, 2023	356,394	$	26.51

Description:	Level		June 30, 2020
Assets:
Cash and marketable securities held in Trust Account		1	$	202,007,715


	As of June 30, 2023
	Firm Purchase		Other		Total
2023 (remainder of the year)	$	40,551	$	469	$	41,020
2024	—		457		457
2025	—		178		178
2026	—		138		138
2027	—		—		—
Thereafter	—		—		—
Total	$	40,551	$	1,242	$	41,793